When you actually need a fractional CTO (and when you don't)

A founder contacted Pharosyne last month in a panic. Their lead developer had just quit, they were two months from a funding round, and their investor told them they needed "a real CTO" before the next meeting.

They wanted full-time technical leadership starting immediately.

Pharosyne advised them they didn't need a full-time CTO. They needed someone to stabilize their tech, prepare for due diligence, and help hire a replacement lead engineer. That's a 3-month engagement at 16 hours per week. Not a €150k/year salary plus equity.

They closed their Series A six weeks later.

What a CTO actually does

Before deciding what type of CTO you need, let's be clear about the job. A CTO has three core responsibilities:

Technical strategy. Deciding which technologies to use, when to build vs buy, how to architect systems for scale. This requires experience seeing what works and what doesn't across many companies and contexts.

Team leadership. Hiring engineers, setting development practices, running code reviews, resolving conflicts, mentoring juniors. This requires presence and relationship building.

Stakeholder communication. Translating technical concepts for investors, explaining timelines to sales, setting expectations with the CEO. This requires trust and regular access.

Different company stages need different mixes of these three. And different mixes need different levels of commitment.

The three options

Full-time CTO. Salary, equity, full commitment. They're in every meeting, they know every engineer, they own the technical vision completely.

Typical cost: €120-200k salary + 2-5% equity for early stage. Add benefits, office, equipment. Total loaded cost: €150-300k/year minimum.

Fractional CTO. Part-time engagement, typically 8-20 hours per week. They handle strategy and high-level decisions, mentor your tech lead, join key meetings.

Typical cost: €5-15k/month depending on hours and seniority. No equity (usually), no benefits, no commitment beyond the contract.

No CTO. A strong tech lead or senior engineer handles day-to-day technical decisions. Strategic decisions get made by the CEO with advice from advisors or consultants.

Typical cost: €80-120k/year for a senior engineer. Technical advice from advisors at €200-500/hour as needed.

When each makes sense

You need a fractional CTO when:

You're pre-product-market-fit. Your tech requirements will change every few months. A full-time CTO would spend half their time building things you'll throw away. A fractional CTO helps you make good-enough decisions fast, then course-correct.

You need specific expertise temporarily. Scaling from 10k to 1M users. Preparing for a security audit. Building your first AI features. Migrating from monolith to microservices. These are bounded problems that need senior guidance, not permanent headcount.

Your engineering team needs mentorship, not management. You have a capable tech lead who handles daily decisions. But they've never scaled a system past 100k users, never done SOC2 compliance, never hired senior engineers. A fractional CTO gives them a sounding board and accelerates their growth.

You're between CTOs. Your CTO left and you need coverage while you search for a replacement. A fractional CTO keeps things moving and might even help with the hiring process.

You can't afford (or justify) a full-time salary. A €150k CTO salary is a significant burn rate increase. If you're raising your seed round or haven't found product-market fit, that money might be better spent on engineers who ship code.

You need a full-time CTO when:

You have 10+ engineers. At this scale, technical leadership becomes a full-time job. Someone needs to be in standups, doing 1:1s, handling cross-team coordination. 20 hours per week isn't enough.

Technical decisions ARE your competitive advantage. If you're building developer tools, infrastructure, or deep tech, your CTO needs to live and breathe the product. Part-time doesn't cut it.

You're post-Series A with aggressive growth targets. Investors expect dedicated leadership. Rapid hiring requires full-time attention. Technical debt decisions have big consequences.

Your culture requires it. Some teams need a full-time technical leader to set the tone, maintain standards, and be the technical voice in leadership discussions daily.

You probably need no CTO when:

You have fewer than 4 engineers. A senior engineer or tech lead can handle technical decisions. Add an advisor for strategic questions. A CTO title with a 3-person team is just ego.

Your tech is truly commoditized. If you're building a standard web app, using proven stacks, following established patterns, you don't need strategic technical guidance. You need good execution.

One of the founders is technical. A technical co-founder who's hands-on often fills the CTO gap naturally, even without the title. Adding a separate CTO can create confusion.

Cost comparison: a real example

Consider an actual scenario. A SaaS startup, 6 engineers, €2M seed raised, 18 months runway.

Option A: Full-time CTO

• Salary: €140k/year
• Equity: 3% (value TBD)
• Benefits/overhead: €20k/year
• Total year 1: €160k cash
• Recruiting time: 3-4 months
• Risk: Wrong hire is extremely costly

Option B: Fractional CTO (12 hours/week)

• Monthly retainer: €8k
• No equity, no benefits
• Total year 1: €96k
• Start time: 2 weeks
• Risk: Less cultural integration

Option C: Senior Tech Lead + Advisor

• Tech lead salary: €90k/year
• Advisor hours (4/month): €24k/year
• Total year 1: €114k
• Already hired: immediate
• Risk: Strategic gaps

For this company, Pharosyne recommended Option B for year one. The engineering team was capable, they just needed strategic guidance and help preparing for Series A. After they raised, they could hire a full-time CTO with proper budget and time to search.

Warning signs you're making the wrong choice

You're hiring a full-time CTO to "look serious to investors." Investors care about results, not org charts. A company that's shipping fast with fractional leadership beats a company burning cash on executive salaries.

You're using a fractional CTO as a crutch. If you've had a fractional CTO for 2+ years and your team still can't make decisions without them, something's wrong. The goal is building internal capability, not permanent dependency.

You're expecting a CTO to write code. CTOs who spend significant time coding aren't doing CTO work. If you need another engineer, hire an engineer. If you need leadership, that's different.

You're hiring a CTO to fix a team problem. Dysfunctional teams need management attention, process changes, sometimes different people. A CTO won't magically fix team dynamics by existing.

How to evaluate a fractional CTO

If you're considering the fractional route, here's what to look for:

Relevant experience at your stage. Someone who's only worked at 500-person companies might not understand startup constraints. Someone who's only done early stage might struggle with scale problems.

Clear communication style. They'll be context-switching between your company and others. Can they get up to speed quickly? Do they communicate clearly in writing? Are they responsive when urgent issues arise?

Specific outcomes orientation. Good fractional CTOs focus on deliverables: "In 3 months, you'll have SOC2 compliance, a hiring pipeline, and a documented architecture." Bad ones talk about "providing strategic guidance."

References from similar situations. Ask for references from companies at your stage with similar challenges. Ask those references what specifically improved.

A clear exit plan. The best fractional CTOs work themselves out of a job. They build internal capability. They help you hire their replacement. They don't create dependency.

The recommendation

Start with the minimum viable leadership structure. Most early-stage companies need less CTO than they think.

If you're under 8 engineers, start with a strong tech lead and a fractional CTO for strategic guidance. Keep the fractional engagement until you hit a clear inflection point: post-Series A, team size over 10, or technical complexity that demands full-time attention.

When you do hire a full-time CTO, you'll know what you need because you've worked with a fractional one. You'll have clearer job requirements, better interview questions, and realistic expectations.

If you're trying to figure out what your company actually needs, book a call. Pharosyne has been on both sides of this decision many times and can assess your situation quickly. Learn more about the fractional CTO services available, or read about Pharosyne's experience advising startups and enterprises.