For most companies under $20M in revenue, a full-time CFO is more finance leadership than the business can use. For most companies over $50M, a fractional CFO is less than the business needs. The space between is where the decision gets interesting.
The cost of a full-time CFO
A CFO at a $10M to $50M company earns roughly $200,000 to $350,000 in base salary. Add a bonus of 20% to 40%, payroll taxes and benefits of another 20% to 25%, and at a venture-backed company an equity grant of 0.5% to 2%. If you use a recruiter, the fee is typically 25% to 30% of first-year cash compensation, or $60,000 to $100,000. Year one all-in lands between $300,000 and $500,000 before equity. Searches take three to six months, and a wrong hire costs most of that again.
The cost of a fractional CFO
Published retainers run $3,000 to $12,000 a month, or $36,000 to $144,000 a year. There is no recruiter fee, no benefits and usually no equity. A three-month minimum with 30 days notice is the common term, so a poor fit costs a quarter’s fees.
Where full-time starts to make sense
The thresholds are about workload more than revenue, but revenue is a fair proxy:
- Under $10M: fractional almost always. The CFO work fits in one or two days a week.
- $10M to $30M: fractional plus a full-time controller is the common setup. The controller ($90,000 to $150,000) owns the close and the team; the fractional CFO owns strategy, cash and capital.
- $30M to $50M: the switch usually happens here, driven by a finance team of four or more, multiple entities, monthly lender reporting or a fundraising cadence of a round every 18 months.
- Over $50M, or preparing for an IPO or a serial acquisition program: full-time, and usually with a controller and FP&A under them.
What you give up with fractional
Availability is the main loss. A fractional CFO with four or five clients cannot drop everything for a two-week crisis, and the CEO waits a day for some answers. Day-to-day team management suffers too: the bookkeeper or controller works without a finance leader in the room most of the week. Relationships with banks and investors belong partly to someone who also serves other companies. And a fractional CFO rarely carries the internal politics of a large leadership team the way an employee does.
What you gain
Experience per dollar. A $7,000-a-month fractional CFO has often run finance at several companies larger than yours and has seen your problem before. You can also change the scope month by month: more hours before a raise, fewer in a quiet quarter.
The handover
Many fractional CFOs plan their own exit. When the company reaches the threshold, the fractional writes the job description, sits on the interview panel and hands over the forecast and the bank relationships. Ask about that at the start, because it tells you how the CFO thinks about the role.