Before you pay an agency to build
An agency builds what it is asked to build, and it is paid more when the request is larger. That is not dishonesty, it is the commercial model, and it means the one party in the room with no incentive to say the specification is wrong is the one writing the quote.
A fractional CTO's first job here is usually small and worth more than anything else in the engagement: cutting the specification to what the first customers will actually use, choosing a stack the company can hire for later, and reading the statement of work before it is signed.
- The code lives in a repository the company owns, from the first commit, with the agency invited in rather than the other way round.
- Cloud, domain and app store accounts are in the company's name and paid on the company's card.
- The contract assigns the intellectual property in the work to the company on payment, in words, not by assumption.
- Acceptance criteria are written down, so a milestone is either met or not met.
The first engineering hire
The first engineer decides more of the codebase than any hire after them, and a non-technical founder has no reliable way to tell a strong one from a confident one. This is where the seat earns its rate most visibly: writing the role, running the technical interview, and sitting in the final round.
The usual mistake is giving the first hire the CTO title to win them. It attracts people who want to manage before there is anybody to manage, and it leaves no room above them when the company does need a technical leader. A senior engineer title with a clear path is the honest offer.
The technical story for a seed round and investor diligence
Seed investors rarely run formal technical diligence, but they do ask who owns the technology, and a founder who answers that the agency does has answered a different question. By Series A the questions become a process: architecture, security basics, dependence on any one supplier, whether the roadmap is buildable with the team and money being raised.
A fractional CTO prepares the technical section of the data room, sits in the calls where the questions are asked, and says plainly what is not yet solved. Investors forgive a known gap with a plan far more readily than a gap they find themselves.
Equity or day rate
A fractional CTO is normally paid a day rate. Some take a small option grant alongside it at an early company, and because they do not work the hours EMI requires, those options are usually unapproved. Equity is not a substitute for the rate; somebody working for equity alone is a co-founder, and should be treated and vetted as one.
A full-time CTO is a different offer: a base salary, a larger option grant than most other seats at the same stage, and the expectation of staying for years. The salary bands by stage are on the CTO salary page; a fractional CTO at two days a week costs £6,133 to £10,733 a month against £16,360 a month for a full-time CTO in year one on a £145,000 base.
When to switch to a full-time CTO
Full-time wins once the engineering team needs managing every day, which usually means more than about fifteen engineers or a product shipping daily. Before that, a capable lead engineer running the team with a fractional CTO above them on architecture, hiring and investor questions is usually the better shape, and much cheaper.
A good fractional CTO raises the switch point before you do, and helps hire the person who replaces them.
Fractional CTO, technical co-founder or agency?
The three are not exclusive. The common working shape at seed is an agency or a small team building, with a fractional CTO setting direction and checking the work until there is an engineering lead in house.
| What you get | What it costs | Best when | |
|---|---|---|---|
| Fractional CTO | Senior technical judgement, part-time, on your side of the table | £800 to £1,400 a day | You need decisions, hiring and investor answers, not more code |
| Technical co-founder | A builder with a founder's stake and commitment | Founder equity, and the hardest search of all | The technology is the company and somebody has to live inside it |
| Development agency | A team that builds to a specification | A quote per project or a monthly retainer | The specification is settled and somebody senior checks the work |
Common questions
How much does a fractional CTO cost for a startup?
In the UK, £800 to £1,400 a day. At one day a week that is £3,067 to £5,367 a month, and at two days £6,133 to £10,733. Most seed companies start at one day, rising around a raise or a first engineering hire.
Does a non-technical founder need a CTO before raising?
Not a full-time one. Investors want to know who owns the technology and whether the roadmap is buildable. A fractional CTO who can answer that, and has prepared the technical section of the data room, covers it at seed. By Series A expect a technical leader in the business.
Should a fractional CTO get equity?
Sometimes a small option grant alongside the day rate, rarely instead of it. Because a fractional CTO does not meet the EMI working-time test, the options are usually unapproved. Somebody offering to work for equity alone is proposing to be a co-founder, which is a different decision.
Can a fractional CTO manage our development agency?
Yes, and it is one of the most common reasons startups hire one. They review the specification and the statement of work, make sure the code and accounts are in the company's name, set acceptance criteria and check the work, so the founder is no longer approving what they cannot evaluate.
More of them, on hiring, contracts and what a fractional engagement costs, on the fractional executive FAQ.