Early finance work is often about invoices, payroll, and a basic model. Growth adds pricing choices, new hires, and investor asks. At that point, leaders must pick between a full-time CFO and an outsourced or fractional CFO. The right choice depends on cost, the skills you need this year, and how fast you must move. This guide gives plain steps to compare both paths and act with less risk.
Why this choice matters for startups
The CFO role shapes cash, hiring, and the story you tell investors. A good fit will shorten funding cycles, align teams, and prevent costly mistakes. A poor fit will slow decisions and create confusion. The goal is not a title. It is the right level of skill and time, at a cost your runway can support.
What a CFO does at Seed, Series A, and Series B
The core work changes as you scale.
Seed
- Build a simple model and cash plan
- Set a spend policy and basic approvals
- Choose an accounting stack and close the month on time
- Prepare basic metrics for investor updates
Series A
- Add a detailed budget and hiring plan
- Build cohort views and unit economics
- Support pricing, packaging, and go to market plans
- Prepare data room, cap table checks, and board packs
Series B
- Build a rolling forecast with scenario tests
- Add revenue recognition rules and controls
- Guide debt options and treasury needs
- Lead cross functional planning and OKRs
You may not need all of this in house. The mix of work should guide the choice.
Cost breakdown
Full-time CFO costs
- Base salary
- Bonus or incentives
- Equity grants
- Payroll taxes and benefits
- Tools, systems, and possible staff support
- Office and travel
All in, the annual cash cost can be high. Equity adds long term cost. The hire also brings leadership capacity and deep context.
Outsourced or fractional CFO costs
- Monthly retainer or hourly rate
- Scope tied to outcomes and hours
- Optional project fees for fundraising, system change, or due diligence
- Tools may be shared across clients, which can lower your cost
Total cash outlay is lower at first. You can scale time up or down. The trade off is shared attention across clients.
Capability and control comparison
Strategy and planning
- Full-time: deep context on product, roadmap, and team. Can lead annual plan and weekly checkpoints.
- Outsourced: strong planning skills on a set schedule. Best used when you have a clear cadence and good internal owners.
Fundraising and board support
- Full-time: on call for investor asks, can run data rooms, and coach leaders before meetings.
- Outsourced: can prepare materials and join meetings as needed. Works well if you set dates and keep a tight list of deliverables.
Accounting, FP&A, and systems
- Full-time: can own the end to end process, hire staff, and drive system choices.
- Outsourced: can design the model, build reporting, and manage the close with an external bookkeeping team.
Compliance and risk
- Full-time: strong for complex needs, such as revenue recognition, global payroll, and tax planning.
- Outsourced: strong for standard needs with clear scope. Will flag edge cases and bring partners when needed.
Availability and response time
- Full-time: immediate, with guardrails for deep work.
- Outsourced: within the service window. Add a clear rule for urgent issues so nothing slips.
When to hire full-time vs when to outsource
Hire a full-time CFO when
- You plan to raise a large round within six to nine months
- Your headcount will double this year and you need tighter controls
- You have complex revenue rules, multi country operations, or debt
- You want a finance leader to coach VPs and own cross functional planning
Use an outsourced or fractional CFO when
- You need senior help a few days a week, not daily
- Your main needs are model work, board packs, and a steady close
- You want to delay fixed cost while you test channels and pricing
- You need flexible scope that can scale each quarter
You can also blend both. Use a fractional CFO now, then convert to full-time later, or keep a full-time finance lead and add fractional support for a big project.
Decision framework with scoring
Use a simple score to compare options. Rate each item from 1 to 5. Higher is more important to you.
- Fundraising in next 9 months
- Size of round or debt
- Hiring pace and need for controls
- Complexity of revenue and contracts
- Number of markets or entities
- Speed of decisions needed each week
- Budget for cash cost this year
- Comfort with part-time leadership
Add the scores for the full-time path and for the outsourced path. If full-time is clearly higher, start that search. If scores are close or budget is tight, start with fractional and set a review date.
90-day plan for either path
If you choose a full-time CFO
- Weeks 1 to 4
- Share org map, roadmap, board decks, and investor notes
- Review the model, close checklist, and cash runway
- Agree on the next three goals and the first budget cycle
- Weeks 5 to 8
- Tune the revenue model and hiring plan
- Set a monthly planning and review rhythm
- Draft a simple policy pack for spend, travel, and approvals
- Weeks 9 to 12
- Ship a new dashboard and a rolling forecast
- Prepare the data room if a round is planned
- Propose any system changes and a timeline
If you choose an outsourced or fractional CFO
- Weeks 1 to 4
- Define scope, hours, and outcomes. Name one internal owner
- Audit the model, the close, and the board pack
- Set a weekly check in and a monthly review
- Weeks 5 to 8
- Ship a budget and hiring plan for the next two quarters
- Build a clean data room index and a board packet template
- Map finance tasks and assign owners for close and payments
- Weeks 9 to 12
- Launch a dashboard with key metrics and targets
- Close one month on time with a clear checklist
- Review results and decide to scale hours up or down
Both plans create steady habits and visible results in three months.
Risks to watch and simple fixes
Role confusion
If founders still handle finance tasks, decisions slow. Fix by writing an owner list. Move approvals, vendor setup, and cash runs to the CFO’s team with clear limits.
Scope creep
If the work list grows, focus breaks. Fix by keeping a three item priority list each month. Park new asks in a backlog and pick the next item only when one is done.
Tool sprawl
If billing, CRM, and accounting do not match, reports break. Fix by setting shared codes for customer, product, and plan. Reconcile monthly.
Budget shock
If cost rises fast, runway shrinks. Fix by tying spend to a simple rule. For example, unlock a hire after two months of hitting a bookings target.
Slow fundraising prep
If files are not ready, delays compound. Fix by keeping a small data room live at all times. Update metrics, contracts, and policies each month.
Next steps
Decide what you need in the next 12 months. Score the two paths with the framework. Pick the option that fits your budget and timing. Set a 90-day plan with clear owners and outcomes. Review results at the end of the quarter. If you chose fractional and needs grow, plan a full-time hire. If you chose full-time and cost strains runway, add fractional help for projects and protect the core.
