For a software company, the CTO question is often tangled up with a co-founder question. Founders without a technical partner sometimes look for a CTO who will join for equity and a small salary, and spend a year searching. A fractional CTO gives the company technical leadership in the meantime and often clarifies what the full-time role needs to be.
The full-time math
A CTO at a $10M to $50M company typically earns $200,000 to $350,000 in base salary, with a bonus and equity. At an early-stage startup, the cash may be lower and the equity higher: a first CTO hire after founding can ask for 1% to 5%, and a co-founder CTO far more. Payroll taxes and benefits add 20% to 25%, and a recruiter adds 25% to 30% of first-year cash. Year one in cash runs roughly $250,000 to $450,000 at an established company. Engineering leaders are hard to recruit, and searches often take four to six months.
The fractional math
Fractional CTO fees run from about $3,000 a month for advice to $15,000 for an embedded role, roughly $36,000 to $180,000 a year. Many work month-to-month. Equity is sometimes part of the deal at startups, usually under 1%.
Where full-time starts to make sense
The engineering team is the guide.
- No engineers, an outside agency or freelancers: fractional. The job is oversight and decisions, a few days a month.
- One to five engineers: fractional at a standing level, with a senior engineer or tech lead running day-to-day work. The fractional sets architecture, hires and reviews.
- Five to ten engineers, or software is the product and the company has raised a Series A: the switch usually happens here. Hiring, management and architecture decisions become daily work.
- More than ten engineers: full-time, often with engineering managers reporting to the CTO.
For non-software businesses, such as a services firm or a manufacturer whose software is internal, the threshold is much higher. Many never need a full-time CTO and run with a fractional CTO and an IT manager.
What you lose with fractional
You lose a technical leader in daily standups and code reviews, and the team has less mentoring. Recruiting senior engineers is harder, because they want to know who leads engineering full-time. A fractional is also less available during an outage or a security incident, unless the contract includes on-call terms. And you lose some long-term ownership: a full-time CTO lives with the consequences of architecture decisions for years.
What you gain
You get senior judgment early, when mistakes in architecture, vendor contracts and code ownership are cheapest to avoid. You keep equity that would otherwise go to a first CTO hire before you know whether the role fits. And you get a person who can help hire the full-time CTO: write the description, interview candidates and assess their technical depth, which a non-technical founder cannot do alone.
A sensible sequence
Fractional CTO first, with a strong senior engineer or tech lead on the team. Promote the tech lead to engineering manager as the team grows. Hire a full-time CTO when the team passes about ten engineers or when the technical roadmap becomes the main driver of company value.