The question comes up in every board meeting: “Do we need a CTO?” The follow-up is often: “Can we afford one?” Between these two questions lies an increasingly popular option: the fractional CTO.
But when does fractional make sense versus full-time? And when do you actually need neither? This post provides a decision framework based on dozens of engagements with companies from seed stage to Series C.
The Three Options
Let’s define the territory:
Option 1: No CTO (Yet)
Best For: Pre-seed to early seed stage, technical founders, small teams (<5 engineers)
What This Looks Like:
- VP Engineering or senior technical IC leads development
- CEO or founder makes strategic technical decisions
- Engineering manager handles people management
- No dedicated strategic technology role
When This Works:
- Product is validated but not yet scaling
- Technical decisions are straightforward
- Team is productive and self-directed
- Founders have enough technical literacy
- Focus is entirely on product-market fit
When This Breaks:
- Technical decisions increasingly complex
- Board or investors asking technical questions founders can’t answer
- Engineering team needs strategic direction
- Scaling challenges emerging (performance, reliability, security)
- Recruiting and retaining technical talent becomes difficult
Option 2: Fractional CTO
Best For: Seed to Series B, technical transitions, between CTOs, strategic guidance needed but not full-time
What This Looks Like:
- 8-16 hours/week strategic technical leadership
- Attend leadership meetings and board presentations
- Make architectural decisions and guide technical strategy
- Mentor engineering leadership
- Available for critical decisions but not day-to-day management
When This Works:
- Need strategic guidance more than hands-on management
- Budget-conscious but recognise need for executive technical leadership
- Have strong engineering manager(s) handling day-to-day
- Technical decisions are high-stakes but not constant
- Want diverse external perspective and experience
When This Breaks:
- Need full-time presence for cultural change
- Too many simultaneous technical initiatives requiring coordination
- Engineering organisation larger than 30-40 people needing dedicated leadership
- Board expects dedicated executive-level commitment
- Day-to-day technical decisions backing up without leadership
Option 3: Full-Time CTO
Best For: Series B+, 30+ person engineering teams, regulated industries, complex technology as competitive advantage
What This Looks Like:
- Full-time strategic and operational technical leadership
- Member of executive team and board participant
- Own technology budget and hiring
- Day-to-day engineering organisation management
- Drive technical culture and long-term vision
When This Works:
- Engineering organisation at scale (30+ people)
- Technology is core differentiator
- Complex regulatory or security requirements
- Board and investors expect dedicated technical executive
- Multiple parallel technical initiatives requiring coordination
- Need to build technical culture and organisation
When This Breaks:
- Company can’t attract CTO-level talent (market, location, stage)
- Budget constraints make $250K-$400K+ compensation difficult
- Finding the right CTO takes 6-12 months you don’t have
- Role poorly defined leading to mismatched expectations
The Decision Framework
Factor 1: Engineering Team Size
1-10 Engineers: Fractional or No CTO
- Strong engineering manager can handle people management
- Strategic decisions are infrequent enough for part-time guidance
- Full-time CTO would be underutilized
10-30 Engineers: Fractional CTO Sweet Spot
- Need strategic direction but not full-time operational management
- Multiple teams requiring coordination
- Architecture decisions increasing in frequency and stakes
- Recruiting and hiring need executive-level guidance
30+ Engineers: Full-Time CTO (Usually)
- Organisation needs dedicated leadership
- Cultural and structural decisions require constant attention
- Budget can support full-time executive compensation
- Board expectations for dedicated technical executive
Exceptions: Some 50+ person engineering orgs thrive with VP Engineering + fractional strategic advisor. Some 20-person teams need full-time CTO due to complexity.
Factor 2: Technical Complexity
Low Complexity: No CTO or Fractional
- Well-understood technology stack
- Standard architecture patterns
- Few integration points
- Minimal regulatory/security requirements
Examples: Standard SaaS, mobile app with backend, e-commerce
Medium Complexity: Fractional CTO
- Custom architecture requirements
- Multiple integrations and partners
- Moderate regulatory requirements (SOC 2, etc.)
- Scaling challenges but manageable
Examples: FinTech without bank integration, healthcare without PHI, B2B platforms
High Complexity: Full-Time CTO
- Novel technical challenges
- Heavy regulatory requirements (banking, healthcare)
- Real-time systems or complex distributed systems
- Security-critical applications
- AI/ML as core product
Examples: Banking infrastructure, clinical healthtech, autonomous systems, high-frequency trading
Factor 3: Growth Stage & Funding
Pre-Seed / Bootstrapped: No CTO
- Focus: Product-market fit
- Budget: Tight
- Decision: Defer until Series A or clear need emerges
Seed Stage ($1M-$5M): Fractional CTO
- Focus: Product scaling, first hires
- Budget: Limited but growing
- Decision: Fractional provides strategic guidance without full-time cost
Series A ($5M-$15M): Fractional → Full-Time Transition
- Focus: Team scaling, architecture decisions
- Budget: Can support $250K+ compensation
- Decision: Often start fractional, transition to full-time at 20-30 people
Series B+ ($15M+): Full-Time CTO
- Focus: Organisation building, technical culture
- Budget: Must support executive team
- Decision: Full-time CTO expected by investors and board
Factor 4: Founder Technical Depth
Technical Founder as CEO: Fractional CTO or No CTO Longer
- Founder makes architectural decisions effectively
- Needs strategic sounding board, not replacement
- Fractional CTO serves as advisor and validator
Technical Founder (Not CEO): Fractional or Full-Time
- Depends on whether technical founder wants CTO role
- Fractional helpful if founder wants to stay hands-on IC
- Full-time CTO if founder wants to step back from leadership
Non-Technical Founders: Fractional → Full-Time Earlier
- Need technical leadership sooner
- Fractional CTO bridges knowledge gap
- Transition to full-time CTO around Series A
Factor 5: Urgency of Technical Decisions
Continuous Decisions: Full-Time CTO
- Daily architecture decisions
- Constant technical recruiting
- Ongoing vendor evaluations
- Real-time incident response needs
Periodic Strategic Decisions: Fractional CTO
- Quarterly roadmap planning
- Monthly architecture reviews
- Periodic hiring and vendor decisions
- Strategic guidance more than daily operations
Occasional Guidance: No CTO
- Annual technology planning sufficient
- Few technical decisions between product features
- Engineering manager handles most questions
Cost-Benefit Analysis
Full-Time CTO Costs
Compensation: $200K-$400K base + equity (0.5%-2%) Recruiting: 3-6 months + 20-30% of base (recruiter fees) Onboarding: 3-6 months until fully productive Risk: Wrong hire costs 12-18 months and significant organisational disruption
Total First-Year Investment: $300K-$600K including recruiting, equity, and onboarding costs
Fractional CTO Costs
Monthly: $8K-$15K for 8-16 hours/week Setup: Immediate start (no recruiting) Onboarding: 2-4 weeks until productive Risk: Can scale up/down or end engagement with 30 days notice
Total First-Year Investment: $96K-$180K with flexibility to adjust
Break-Even Analysis
When Fractional is More Cost-Effective:
- Need less than 20 hours/week of CTO time
- Timeframe is 6-18 months before full-time hire
- Want to “try before you buy” on CTO role definition
- Budget doesn’t support full-time executive yet
When Full-Time is More Cost-Effective:
- Need 30+ hours/week of CTO attention
- Timeframe is 2+ years minimum
- Organisation at scale (30+ engineers)
- Cultural leadership is as important as strategic guidance
Common Scenarios
Scenario 1: Post-Series A, Scaling from 10 to 30 Engineers
Situation: Just raised Series A, plan to triple engineering team in 12 months. Technical founder/CEO needs help with architecture and recruiting but can’t dedicate time.
Recommendation: Fractional CTO (12 months) → Full-Time CTO
Why:
- Immediate need for strategic guidance (12 hours/week)
- Fractional CTO architects hiring plan and onboards first hires
- Use fractional engagement to define full-time CTO role
- Transition to full-time CTO when team hits 25-30 people
- Fractional CTO can participate in full-time CTO search
Scenario 2: Non-Technical Founder, Pre-Seed, 3 Contract Developers
Situation: Non-technical founder with MVP built by contractors. Raised $500K pre-seed. Need to hire first engineers and rebuild MVP properly.
Recommendation: Fractional CTO (6-12 months)
Why:
- Can’t afford full-time CTO yet ($500K runway)
- Need strategic guidance on hiring first 2-3 engineers
- Need architecture decisions for MVP rebuild
- 8 hours/week sufficient for early stage
- Can re-evaluate at Series A
Scenario 3: Series B, 40 Engineers, CTO Departed
Situation: CTO left after 3 years. VP Engineering handling operations. Board wants replacement in 90 days. Engineering team needs strategic direction.
Recommendation: Fractional CTO (Interim) → Full-Time CTO
Why:
- Immediate gap in leadership (start fractional in 1-2 weeks)
- Full-time search takes 4-6 months realistically
- Fractional provides continuity and stability
- Can evaluate internal VP Engineering for promotion with fractional’s input
- Fractional hands off to full-time CTO when hired
Scenario 4: Profitable, 20-Person Engineering Team, Bootstrap
Situation: Profitable SaaS company, bootstrapped, 20 engineers. VP Engineering handles team management well but founders want strategic technology guidance.
Recommendation: Fractional CTO (Ongoing)
Why:
- Strong VP Engineering handles day-to-day
- Strategic decisions are quarterly, not daily
- Company prefers lean executive team
- Fractional cost (12 hours/week) fits budget better than $300K+ full-time
- Can continue indefinitely or convert to full-time if company scales
Scenario 5: Enterprise B2B, Complex Integrations, 15 Engineers
Situation: Building complex enterprise integrations. High security requirements. Series A funded. Engineering team excellent but need strategic technical leadership.
Recommendation: Fractional CTO → Full-Time CTO
Why:
- Complexity warrants CTO-level guidance
- Strategic architecture decisions frequent
- Security and compliance need executive attention
- Start fractional (16 hours/week) given team size
- Plan full-time hire at 25-30 engineers or Series B
Making the Transition: Fractional to Full-Time
Many companies start with fractional and transition to full-time. Here’s how to do it well:
Timing the Transition
Indicators It’s Time for Full-Time:
- Engineering team hits 25-30 people
- Fractional CTO consistently maxing out hours
- Day-to-day decisions waiting for fractional’s availability
- Board expectations for dedicated executive
- Organisation building (process, culture) becomes priority
- Budget supports $250K-$400K compensation
Transition Approaches
Approach 1: Fractional Leads Search
- Fractional CTO defines full-time role
- Participates in candidate interviews
- Provides technical evaluation
- Onboards new full-time CTO
- Transitions out over 30-60 days
Approach 2: Fractional Converts to Full-Time
- Evaluate fractional CTO for full-time role
- Discuss expectations and fit
- Negotiate full-time compensation
- Not always feasible (fractional may serve multiple clients)
Approach 3: Internal Promotion with Fractional Support
- Promote VP Engineering to CTO
- Keep fractional as strategic advisor (4-8 hours/month)
- Provides continuity and mentorship
- Lower-risk path if strong internal candidate
Red Flags: When Fractional Doesn’t Work
Red Flag 1: Need for Cultural Change Fractional CTOs provide strategic guidance but rarely drive cultural transformation. Full-time required for deep cultural work.
Red Flag 2: Crisis Management If the engineering organisation is in crisis (mass exodus, production disasters, complete lack of process), full-time leadership is needed.
Red Flag 3: Board Optics Some boards expect full-time C-level executives. If board is uncomfortable with fractional model, it won’t work politically regardless of practical fit.
Red Flag 4: Complex Stakeholder Management If the CTO role involves managing multiple complex executive relationships daily, fractional hours won’t suffice.
Red Flag 5: Continuous Technical Recruiting If you’re hiring 2-3 engineers per month, fractional CTO can guide but VP Engineering needs to own recruiting day-to-day.
Frequently Asked Questions
Can fractional CTOs handle fundraising due diligence? Yes. Preparing technology materials for investors is a strong use case for fractional CTOs. Many have done this repeatedly across companies.
What if our fractional CTO has other clients? That’s expected and often beneficial. They bring fresh perspectives from other contexts. Ensure you have guaranteed hours and response time for urgent issues.
Can we switch from fractional to full-time mid-engagement? Yes. Many fractional CTOs will help you hire their full-time replacement. Some may even convert to full-time if fit and interest align.
How do we manage a fractional CTO who’s remote? Same as any remote executive: regular video calls, clear communication, shared docs, and defined availability windows. Most fractional CTOs are well-practiced at remote effectiveness.
What if we hire the wrong fractional CTO? Contracts typically have 30-day termination clauses. Unlike full-time hires (which take months to unwind), fractional engagements can adjust quickly.
Conclusion: A Framework, Not a Rule
There’s no universal answer to “fractional vs. full-time CTO.” The right choice depends on:
- Team size and growth trajectory
- Technical complexity
- Funding and budget
- Founder technical depth
- Frequency of strategic decisions
- Cultural and organisational needs
General Guidance:
- <10 engineers: Fractional or no CTO
- 10-30 engineers: Fractional CTO sweet spot
- 30+ engineers: Full-time CTO (usually)
- Complex tech: Move to full-time sooner
- Crisis situations: Full-time needed
- Strategic guidance: Fractional works well
Many successful companies use fractional CTOs for 6-24 months during specific growth phases, then transition to full-time, or continue fractional indefinitely if it fits their model.
The key is matching the leadership model to your specific context, not following a one-size-fits-all rule.
Considering fractional CTO services for your organisation? Contact Tek42 to discuss whether fractional, full-time, or a hybrid approach makes sense for your specific situation.
Related Services: Fractional CTO Services | Technology Assessments