You’ve reached the point where you need real financial leadership. Decisions are getting bigger, stakes are getting higher, and you’re tired of flying blind. You need a CFO.
But here’s the question that stops most founders: Do you need a full-time CFO, or will a fractional CFO do the job?
This isn’t just a question of budget (though budget matters). It’s a question of fit, timing, and what your business actually needs right now. Let’s break down the real costs and benefits of each option so you can make an informed decision.
What Is a Fractional CFO?
A fractional CFO is a senior finance executive who works with your company on a part-time or contracted basis. Instead of paying for 40+ hours a week, you get CFO-level expertise for the hours you actually need — typically 10-30 hours per month.
Fractional CFOs aren’t junior consultants playing dress-up. They’re experienced professionals — often former full-time CFOs — who’ve chosen to work with multiple companies instead of one. You get the expertise without the full-time commitment.
What Is a Full-Time CFO?
A full-time CFO is a dedicated executive who joins your leadership team as a W-2 employee. They’re fully embedded in your company, attending every meeting, managing your finance function, and available whenever you need them.
For large companies with complex operations, a full-time CFO is essential. The question is whether your company has reached that point.
The Cost Comparison: Real Numbers
Let’s start with what everyone wants to know: the money.
Full-Time CFO Costs
| Cost Component | Annual Amount |
|---|---|
| Base Salary | $200,000 - $350,000 |
| Bonus (15-25% of salary) | $30,000 - $87,500 |
| Equity/Stock Options | Variable (1-3% for growth-stage) |
| Benefits (health, 401k, etc.) | $25,000 - $50,000 |
| Payroll Taxes | $15,000 - $27,000 |
| Total Annual Cost | $270,000 - $514,500+ |
And that’s before you factor in:
- Recruiting costs ($50,000-$100,000 for executive search)
- Onboarding time (3-6 months to full effectiveness)
- Opportunity cost if the hire doesn’t work out
Fractional CFO Costs
| Engagement Level | Monthly Cost | Annual Cost |
|---|---|---|
| Light (5-10 hrs/month) | $1,500 - $3,000 | $18,000 - $36,000 |
| Standard (15-20 hrs/month) | $4,000 - $7,000 | $48,000 - $84,000 |
| Heavy (25-40 hrs/month) | $8,000 - $15,000 | $96,000 - $180,000 |
The math is stark: A fractional CFO typically costs 20-40% of a full-time hire while delivering 80%+ of the strategic value.
When a Fractional CFO Makes Sense
A fractional CFO is the right choice when:
1. You’re Between $1M and $30M in Revenue
Most companies in this range need CFO-level thinking but can’t justify a full-time CFO salary. A fractional CFO gives you the strategy without the overhead.
2. You Have Specific, Defined Needs
Raising capital? Going through M&A? Implementing new financial systems? A fractional CFO can tackle these projects intensively, then scale back.
3. Your Finance Function Is Otherwise Handled
If you have a competent controller or bookkeeper handling day-to-day operations, you may only need strategic oversight — not full-time execution.
4. You Value Flexibility
Business needs change. With a fractional CFO, you can scale hours up during busy periods (fundraising, year-end) and down during quieter times.
5. You Want Diverse Experience
Fractional CFOs typically work with multiple companies across industries. They’ve seen patterns you haven’t and can bring outside perspectives.
When a Full-Time CFO Makes Sense
A full-time CFO becomes necessary when:
1. You’re Past $50M in Revenue (Usually)
At this scale, financial complexity demands constant attention. M&A activity, multiple business units, international operations, and complex capital structures require someone fully dedicated.
2. You’re Going Public (IPO)
Public company financial requirements — SEC reporting, SOX compliance, investor relations — require a full-time executive. No fractional solution can handle this.
3. You Have a Complex Finance Team to Manage
If you have controllers, FP&A analysts, treasury staff, and tax specialists, someone needs to lead and develop that team full-time.
4. You Need Constant Board and Investor Interaction
If you’re presenting to your board monthly, meeting with investors weekly, and constantly fielding financial questions, you need someone always available.
5. Strategic Finance Is Central to Your Business Model
Some businesses (finance, insurance, asset-intensive industries) have finance so core to their model that a full-time CFO is non-negotiable from earlier stages.
The Hybrid Model: Getting the Best of Both
Many growing companies use a hybrid approach:
- Start with a fractional CFO to build financial infrastructure and strategy
- Add a strong controller to handle day-to-day operations
- Increase fractional hours as complexity grows
- Transition to full-time when the math finally makes sense (usually $30M+ revenue)
This graduated approach lets you build capability without overcommitting too early.
Questions to Ask Yourself
Before making a decision, answer honestly:
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How many hours of CFO-level work do you actually need per week? If it’s under 15 hours, fractional is almost certainly the answer.
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What’s your runway? A full-time CFO is a 2-3 year commitment minimum. Make sure you can sustain it.
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What specific outcomes do you need? If you need a fundraise closed or systems implemented, project-based fractional work may be ideal.
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How complex is your finance function? Simple = fractional works great. Complex = maybe need full-time.
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What’s your growth trajectory? Hypergrowth companies may need to hire full-time earlier. Steady growers can stay fractional longer.
The ROI Question
Both fractional and full-time CFOs should deliver measurable ROI. Expect:
- Better capital efficiency (reducing cash burn, optimizing working capital)
- Improved fundraising outcomes (higher valuations, faster closes)
- Reduced financial risk (better controls, compliance, forecasting)
- Time savings for founders (offloading financial decisions to an expert)
A good fractional CFO often pays for themselves within 3-6 months through identified savings, improved pricing, or better capital allocation.
Making the Decision
Here’s the simple framework:
| Your Situation | Recommendation |
|---|---|
| < $3M revenue, need strategic guidance | Fractional (light engagement) |
| $3M-$15M revenue, growing steadily | Fractional (standard engagement) |
| $15M-$30M revenue, complex operations | Fractional (heavy) or evaluate full-time |
| > $30M revenue, multiple entities/locations | Likely full-time |
| Preparing for IPO or acquisition | Full-time (or very heavy fractional) |
Ready to Explore Your Options?
At Pythia Insights, we offer fractional CFO services designed to give growing businesses the financial leadership they need — without the full-time cost.
Not sure which option is right for you? Let’s talk. We’ll give you an honest assessment of what your business actually needs, even if the answer isn’t us.