When to hire a part-time CFO or CTO, and when not to

Infinia ยท

You know the hire. It's the one you think about at 11pm.

It might be the CFO who could make your board deck reconcile on the first try. It might be the CTO who could tell you whether your team is slow or careful. Either way, it's a $250,000 salary plus equity, and you're doing $2 million in ARR.

So you wait. But that also has a cost.

What waiting hurts

Jason Lemkin puts it bluntly: "At $2m ARR, you start to get too many things wrong for it to be 100% outsourced." Collections slip, and bookings get written off. Churn gets measured wrong. A board member starts quietly redoing your metrics.

On the tech side, it's the release that keeps slipping, or the agency project quoted at three months that takes fifteen. Or, it's the CTO who leaves, and you realize nobody else knows how anything works.

Victor Cheng says most founder CEOs wait "12 to 18 months too long" to bring in a CFO. The same is probably true of the CTO.

The two bad options

Most founders see two choices:

  1. Hire the full-time executive too early. You pay senior rates for a job that's two days of work a week.
  2. Hire someone junior and hope. A junior can keep the books or close tickets. They can't build the board pack, run the raise, or tell you which technical risk will sink you.

There's a third option, and it's the one I found in my first exit.

The third option: the senior hire, part-time

A fractional CFO or CTO is a senior executive who works with you one or two days a week. Published rates for a fractional CFO at your stage run about $2,500 to $8,000 a month for 5 to 15 hours.

A fractional CTO runs roughly $3,000 to $15,000 a month. That's a fraction of a $250,000 salary, and it buys you someone who has already done the job.

But the word "fractional" covers a lot of people who shouldn't have the title. Many are between jobs. They take meetings but not responsibility. You've probably met one.

The difference comes down to one thing. A good fractional owns a number. A bad one owns a calendar.

How to tell the difference

Before you hire anyone, ask three questions:

The best answer sounds like this: "VP Finance at a $25 million SaaS company. I owned runway and took it from 9 months to 24." If they can't answer in one sentence, keep looking.

Then ask one more: "When would you tell me to replace you with a full-time hire?" A good fractional has an answer. Their job is to build the role until you can afford to fill it.

When you don't need one

Sometimes the honest answer is that you're not there yet. If your books are a mess, start with a better bookkeeper. If you have one engineer and no customers, you need a builder, not a CTO.

The hire you need but can't afford yet should be the person who gets you to the point where you can afford it.

*Infinia introduces founders to fractional CFOs and CTOs who can answer all three questions. One introduction, free.