What are the pros and cons for an early-stage company to work with a fractional CFO?


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Unsurprisingly, early-stage companies need to be on top of their financials. Reasons for this include tax compliance, shareholder information rights, cash management, and business performance insights. The question is, what is the best approach to achieve this with limited resources?

There are a few ways, and they can all be the right thing at the right time. In a new startup, founders usually lead financial planning and analysis. Especially up until the first paying customers and external investors are on board. At this point, financial compliance tasks are typically divided between an internal controller and an outsourced bookkeeper. As the startup grows into a scaleup, the demands increase for a finance resource that can oversee the presentation of historical financials, the day-to-day finance operations, the financial analysis of the key performance indicators, and the forward-looking financial planning. This situation leads to a gradual increase in demand for specialist finance team members and, with that, a finance team manager, first a finance director, and later an experienced CFO.

A fractional CFO can provide cost-effective support as an early-stage company transitions from a startup to a scaleup. Early on, as an advisor to the founders. Later, as a guide to the finance team. Finally, as an advisor to the CFO. Fractional CFOs come in different sizes, from independent consultants to a firm of fractional CFOs with their own CFO-tech-stack and support team. Both types of fractional CFO support can be suitable as long as they know your industry and investor base.

Before engaging a fractional CFO, it is crucial to evaluate the pros and cons of this approach.


  • Cost-effective access to senior authority and ready-to-use templates
  • Benefit from up-to-date market insights and industry benchmarks from other customer projects
  • Independent, experienced advisor in financing and M&A term sheet negotiations


  • Not a long-term solution. Eventually needs to be replaced with a full-time CFO
  • Not a co-founder. Founder-owners can lead by relying on the insights of a fractional CFO
  • Relatively high hourly cash rate. A fractional CFO should initially be paired with a low-cost bookkeeper

Regarding pricing, expect something between EUR 1,000 and 4,000 per month, as a fractional CFO firm can offer to manage an outsourced bookkeeper service and then scale up to a dedicated fractional CFO working flexibly at an agreed monthly retainer. The contract can be terminated at short notice.

By the way, a CFO is not the same as a licensed accountant. There is a separation of duties between the two. A CFO prepares the company financials, and the licensed accountant reviews and, where necessary, audits them.