The trigger is usually one of three things
All three are dated, which is why startups tend to hire fast and why speed matters more here than in almost any other fractional engagement.
- A raise is starting. Investors will want a model whose assumptions survive being questioned, a data room, and somebody who can answer finance questions without the founder in the call.
- A board has formed. A board pack assembled the night before by a founder is a cost that compounds, and one bad meeting sets the relationship back two quarters.
- Runway has become uncertain. Once nobody can say confidently how many months are left, every other decision in the company slows down.
What the seat owns at this stage
- A rolling cash forecast that gets reforecast, not a spreadsheet built once and admired.
- One agreed set of numbers, so the board pack, the model and the investor update do not disagree with each other.
- The raise mechanics: the model, the data room, and surviving diligence.
- Unit economics that can be defended: what a customer costs, what one is worth, and which two changes would move margin.
- Enough finance operations to stop the above being built on sand, usually by fixing the bookkeeper and the stack rather than hiring a team.
What it does not own
Introductions to investors. A fractional CFO's contribution to a raise is the model, the data room and diligence, not a contact book, and a contact book is the most oversold thing in this market.
Being the finance team. At one or two days a week nobody is doing the bookkeeping, running payroll or chasing invoices. If those are broken, fix them underneath the seat rather than expecting the seat to absorb them.
What it costs at this stage
A fractional CFO charges £800 to £1,500 a day, with the upper end for live fundraise and exit work because the consequence of an error is largest there. Most venture-backed companies at this stage run one day a week, moving to two while a raise is live and back down afterwards.
That flexibility is most of the argument. A full-time CFO cannot be dialled up for a quarter and down again, and at pre-Series B the full-time seat is usually both unaffordable and underused.
When to stop being fractional
There is a point where the arithmetic reverses. Broadly: once finance needs three or more days a week consistently, once there is a finance team to manage day to day, or once the company is heading into a transaction that will consume somebody entirely.
The honest version is that a good fractional CFO tells you when you have reached it. Somebody who never raises it is managing their own revenue rather than your company.
What to ask in the interview
- Walk me through the last runway conversation you had to force. What triggered it and what changed?
- An investor wants the data room Monday. What is in it, and what do you refuse to rush?
- Tell me about a forecast of yours that was badly wrong, and what you changed in the model afterwards.
- At what point would you tell us to hire somebody full-time?
Questions
- At what stage should a startup hire a fractional CFO?
- Usually when one of three things happens: a raise starts, a board forms, or nobody can state the runway with confidence. Revenue level matters less than these triggers, because all three create work that a founder and a bookkeeper cannot absorb between them.
- Can a fractional CFO help us raise?
- With the model, the data room and diligence, yes, and that is most of the finance work in a raise. Investor introductions are a different service and are frequently oversold; judge a candidate on the first three rather than on who they claim to know.
- How many days a week does a startup need?
- One day a week is the usual starting point, moving to two while a raise is live. Below one day nobody can hold the function. Above three days consistently, a part-time employee or a full-time hire is normally the better structure.