A fractional CTO is someone who generally takes very little or no equity + salary in exchange for part-time work.

You’re able to get decades of experience from someone you may not be able to afford to have full-time, and have equity left over for future rounds/hires.

An experienced CTO has 20 or more years of experience and can cost from $250,000 to $600,000 per year. That same CTO in a 25% fractional model would cost you $60,000-$150,000 and you’d have access to them between 2 and 3 hours per day.

This gives you access to senior leadership you simply cannot get from a developer with limited experience pretending to be a CTO. And more money left over to pay developers to develop your product.

Below are some lists with some reasons for and against both models.

Reasons to get a full-time CTO

1. More initial buy-in from early investors due to having a team fully committed to one cause
2. Full access to them
3. Feeling of “control”

Reasons to NOT get a full-time CTO

1. The CTO you have in your first year is probably not the one you’ll have in your 4th, but they will have a lot of suddenly non-productive equity if they leave, meaning later investors won’t like the arrangement
2. Cost too much equity, potentially becoming non productive equity a few years down the line when the work no longer matches their skills
3. You will get a less experienced one for the same price when compared to the fractional model

Reasons to get a fractional CTO

1. Up to 80% cheaper than a similarly experienced full-time CTO (up to 98% cheaper if you include lost equity!)
2. Takes very little or no equity
3. The CTO you have in your first year is probably not the one you’ll have in your 4th, but they will have a lot of suddenly non-productive equity when they leave.

Reasons to NOT get a fractional CTO

1. Early investors may not like the arrangement
2. Access to them is more limited, typically 2 days a week, or a few hours per day. You have to ask yourself if you’d rather have a rookie always around, or a grandmaster a few hours per week.
3. You like a sense of control, even if not real

Conclusions

1. Early investors may not like the fractional model, but future you and future investors will like not having 30%+ of equity become unproductive when the skills required for the job outweigh the skills your initial CTO has.
2. A fractional CTO gives you access to leadership and decades of experience that you may not be able to afford full-time
3. The full-time CTO you can afford may not have the skills you need them to have, especially true if they only have experience as a developer. The CTO role is not just a technical one, it’s 80% business, 20% tech.