Full-Time CTO vs Fractional: When to Hire Each

A Series A founder asked me last week: “Should I hire a full-time CTO now or keep using contractors?”

I asked him three questions:

• How many engineers do you have? “Four.”
• Are they productive? “Yeah, shipping features weekly.”
• What would a CTO do all day? “Um… I guess… oversee things?”

That’s not a CTO role. That’s a $250K+ salary for a part-time job.

Here’s when you actually need each type of technical leadership—and what happens if you get the timing wrong.

The Stages of Technical Leadership

Stage 1: Pre-Seed / MVP Building (0-1 Engineers)

What you actually need: Someone who can build.

Bad move: Hiring a “CTO” as your first technical person.

Why? Because CTOs should be strategists, not primarily builders. Your first technical hire needs to write code every day, not attend meetings and plan architecture for a product that might not work.

What to do instead:

• Hire a senior full-stack engineer or tech lead
• Look for someone who’s built 0-to-1 products before
• They should spend 80% of time coding, 20% on architecture decisions

Real example: A founder hired a “CTO” with 15 years of experience as their first technical hire. The CTO wanted to plan architecture, set up processes, and hire a team. Meanwhile, nobody was building the product. Six months later, still no MVP. CTO left, frustrated.

Better approach: Hire a senior engineer who can ship fast. Promote them or transition later when you need actual CTO-level strategy.

Cost: $120K-160K for senior engineer vs. $200K-300K+ for CTO

Want help finding your first technical hire? Check out Building Your First Engineering Team.

Stage 2: Post-Seed / Product-Market Fit (2-5 Engineers)

What you need: Strategic technical guidance, not full-time CTO oversight.

Bad move: Hiring a full-time CTO when you have 3 engineers.

I see this constantly. Founders raise $2M seed round and immediately hire a CTO because “that’s what you’re supposed to do.”

Here’s what actually happens:

• CTO joins, excited to build things
• Realizes there’s not enough work to fill 40 hours/week
• Gets bored
• Starts over-engineering or creating unnecessary processes
• Leaves after 12-18 months
• You just burned $400K+ (salary + equity + recruiting costs)

What to do instead: Get a fractional CTO

At this stage, you need 10-15 hours per week of strategic guidance:

• Code reviews and architecture decisions
• Technical interviews for new hires
• Planning your technology roadmap
• Preparing for due diligence
• Mentoring your tech lead

Real example: A fintech startup with 4 engineers hired me fractionally at $12K/month (15 hours/week). I helped them:

• Hire two more strong engineers
• Pass Series A due diligence
• Set up proper CI/CD and security practices
• Plan their path to SOC 2 compliance

After 8 months, they had 12 engineers and needed full-time leadership. We transitioned one of their senior engineers into the CTO role. Worked perfectly.

Cost: $10K-25K/month fractional vs. $250K+/year full-time

Learn more: Why Post-Seed Startups Need a Fractional CTO.

Stage 3: Series A / Scaling (6-15 Engineers)

What you need: This is the gray area. Could go either way.

Decision factors:

Get a fractional CTO if:

• Your tech lead can manage day-to-day operations
• You’re not hiring aggressively (1-2 engineers per quarter)
• Technical complexity is manageable
• You have other budget priorities (sales, marketing)

Hire full-time CTO if:

• You’re hiring 2+ engineers per month
• You need someone in every planning meeting
• You’re building complex, regulated products (fintech, healthcare)
• Your tech lead doesn’t want the CTO role

Real example: A SaaS company with 10 engineers tried fractional first. After 4 months, they realized they needed someone full-time for:

• Daily technical decisions
• Being in every product planning meeting
• Managing team growth (hiring 3 engineers/month)
• Representing tech in board meetings

They converted to full-time. Right move for their situation.

Cost comparison:

• Fractional: $15K-30K/month = $180K-360K/year
• Full-time: $250K-350K/year + equity + benefits

Stage 4: Series B+ / At Scale (15+ Engineers)

What you need: Full-time CTO, no question.

At this scale, you need someone full-time for:

• Managing multiple teams and tech leads
• Strategic planning for 12-18 months out
• Representing technology in board meetings
• Building the engineering culture
• Handling recruiting at scale
• Managing significant technical debt
• Planning architecture for serious scale

Bad move: Still using fractional leadership.

I’ve seen companies try to scale past 20 engineers with fractional support. It doesn’t work. Too many decisions, too many meetings, too much coordination needed.

Transition strategy:

• Promote from within if possible (best option)
• Hire experienced CTO with scale-up experience
• If using fractional, plan 3-6 month transition period

Cost: $300K-500K+ depending on market and experience level

The “Founder CTO” Exception

If you have a technical co-founder who’s acting as CTO, different rules apply:

Keep them as CTO if:

• They want to transition from builder to leader
• They’re good at hiring and mentoring
• They can delegate and manage up (to CEO and board)
• They’re willing to spend less time coding

Replace them if:

• They only want to code
• They can’t/won’t hire and manage people
• They struggle with strategic thinking
• They don’t want the responsibility

This is a hard conversation, but I’ve seen it go badly when founders avoid it. Better to have honest discussions early.

Better alternative: Founder CTO stays technical (Staff Engineer, Chief Architect) and you hire a professional CTO to lead the team.

Red Flags That You Hired Wrong

Red Flag #1: Your CTO Is Bored

If your full-time CTO says “I don’t have enough to do,” you hired too early.

Fix:

• Transition to fractional arrangement
• Find them a different role
• Part ways amicably

Red Flag #2: Your CTO Is Only Coding

If your full-time CTO spends 80%+ of their time coding, you don’t need a CTO. You need a senior engineer.

Fix:

• Change their title and compensation to match the role
• Hire fractional for actual CTO work
• Look for someone who wants to lead

Red Flag #3: Your Fractional CTO Can’t Keep Up

If your fractional CTO is constantly saying “I need more hours,” you’ve outgrown fractional.

Fix:

• Increase hours temporarily
• Start looking for full-time CTO
• Plan 3-month transition

Red Flag #4: Nobody Knows Who’s In Charge

If your engineers don’t know whether to go to the tech lead or the CTO for decisions, you have a leadership problem.

Fix:

• Clarify roles immediately
• Document decision-making authority
• Consider if you need both roles

The Hidden Costs Nobody Talks About

Full-Time CTO Hidden Costs:

• Recruiting fees: 20-30% of salary ($50K-75K)
• Equity: 1-4% depending on stage
• Benefits: +30% of salary
• Severance if it doesn’t work out: 3-6 months
• Total first-year cost: $400K-600K

Fractional CTO Hidden Costs:

• Less embedded in the culture
• Not in every meeting
• Limited hours can create bottlenecks
• Knowledge transfer when transitioning to full-time

How to Decide: The 5-Question Framework

Ask yourself these questions:

1. How many technical decisions happen per week?

• Less than 10: Fractional is fine
• 10-20: Could go either way
• More than 20: Need full-time

2. How fast are you hiring engineers?

• 1-2 per quarter: Fractional works
• 2-4 per quarter: Consider full-time
• More than 4 per quarter: Need full-time

3. What’s your runway?

• Less than 12 months: Fractional (preserve cash)
• 12-24 months: Either works
• More than 24 months: Can afford full-time

4. How complex is your technical environment?

• Single product, one tech stack: Fractional okay
• Multiple products, several tech stacks: Lean full-time
• Microservices, distributed systems: Definitely full-time

5. How much do you need them in meetings?

• Weekly check-ins: Fractional works
• Daily standups + weekly planning: Borderline
• Daily meetings + ad-hoc discussions: Need full-time

Score:

• Mostly fractional answers: Go fractional
• Mix: Start fractional, plan to transition
• Mostly full-time answers: Hire full-time

Transitions: From Fractional to Full-Time

If you start fractional and need to transition (which is common), here’s how:

Option 1: Convert Your Fractional CTO

Sometimes your fractional CTO is perfect for the full-time role.

Pros:

• Already knows your codebase and team
• Cultural fit already proven
• Faster onboarding

Cons:

• They might not want full-time
• They might lack scale-up experience
• Could limit your options

Option 2: Promote From Within

Promote your senior engineer or tech lead.

Pros:

• Knows everything about the company
• Team already trusts them
• Usually cheaper than external hire

Cons:

• Might lack leadership experience
• Could be better as IC than manager
• May need training and support

Option 3: External Hire

Hire an experienced CTO from outside.

Pros:

• Brings fresh perspective
• Has scaled before
• No internal politics

Cons:

• Expensive and time-consuming to find
• 3-6 month onboarding
• Cultural fit risk

My recommendation: Start with Option 1 or 2. Only do Option 3 if those don’t work.

Common Mistakes and How to Avoid Them

Mistake #1: Hiring Based on Title, Not Needs

Don’t hire a CTO because you think you “should have one.” Hire for the actual work that needs doing.

Mistake #2: Confusing Levels

Senior Engineer ≠ Tech Lead ≠ VP Engineering ≠ CTO

Each role has different responsibilities. Know what you need.

Mistake #3: Optimizing for Investor Optics

“Investors want to see a CTO on the team.”

Maybe. But they also want to see you spend money wisely. A fractional CTO + two more engineers is often better than one full-time CTO.

Mistake #4: Waiting Too Long

Don’t try to save money by never getting technical leadership. The cost of bad technical decisions compounds fast.

The Bottom Line

Hire a senior engineer first (Stage 1: 0-1 engineers) ↓ Get fractional CTO (Stage 2-3: 2-10 engineers) ↓ Hire full-time CTO (Stage 4: 10+ engineers, or sooner if high complexity)

Exceptions exist, but this path works for 80% of startups.

The key insight: Don’t optimize for what sounds impressive. Optimize for what you actually need right now.

A fractional CTO for 15 hours/week is infinitely more valuable than a full-time CTO who’s bored and over-engineering your 3-person product.

Not sure what you need right now? Book a call. I’ll tell you honestly whether you need full-time, fractional, or neither.