Cost Comparison
CTO Cost Comparison: Fractional vs Full-Time vs Consultant
Complete cost breakdown and decision framework for choosing the right technical leadership model for your stage, budget, and needs. Real numbers, no marketing fluff.
By PocketCTO Team · Last updated February 2026 · 13 min read
Contents
The Problem: You need strategic technical leadership but aren't sure whether to hire a full-time CTO ($200k-$400k/year), fractional CTO ($5k-$15k/month), or technical consultant ($150-$300/hour). The wrong choice wastes hundreds of thousands of dollars or leaves critical gaps in technical strategy.
The Solution: Understand the true cost (cash + equity + overhead) and value delivered by each option, then choose based on your stage, team size, and strategic needs—not just budget.
Understanding Your CTO Options
You have four primary options for senior technical leadership:
1. Full-Time CTO
An executive-level employee who works 40+ hours per week, owns technical vision and execution, and typically receives significant equity.
2. Fractional CTO
A seasoned CTO who works part-time (10-20 hours/week) with multiple companies, provides strategic leadership on retainer, and is compensated primarily with cash.
3. Technical Consultant
Project-based expert who delivers specific outcomes (architecture review, tech stack selection, audit), paid hourly or per-project, then disengages.
4. Technical Advisor
Lightweight guidance role (1-5 hours/month), usually equity-compensated, provides mentorship but not hands-on execution. We'll focus on the first three options as they involve significant engagement.
Full-Time CTO: Complete Cost Breakdown
Cash Compensation
Full-time CTO salaries vary significantly by location, company stage, and experience level:
| Company Stage | Base Salary | Bonus/Benefits | Total Cash |
|---|---|---|---|
| Seed Stage | $150k-$220k | $30k-$50k | $180k-$270k |
| Series A | $200k-$280k | $40k-$70k | $240k-$350k |
| Series B+ | $250k-$350k | $50k-$100k | $300k-$450k |
Equity Compensation
CTOs typically receive significant equity grants:
- Seed stage (first 10 employees): 2-5% equity
- Series A (first 50 employees): 1-3% equity
- Series B+ (50+ employees): 0.5-1.5% equity
Equity value: Hard to quantify, but for a company that exits at $100M, 2% equity = $2M. Most startups don't reach liquidity, so equity value is speculative.
Hidden Costs & Overhead
Beyond salary and equity, full-time CTOs incur additional costs:
- Payroll taxes & benefits: +25-35% of salary ($45k-$90k/year)
- Recruiting costs: $20k-$50k (recruiter fees, interview time, opportunity cost of mis-hire)
- Onboarding time: 3-6 months to full productivity
- Management overhead: CEO time managing another executive
Total First-Year Cost: Full-Time CTO
Seed stage: $230k-$360k cash + 2-5% equity
Series A: $300k-$470k cash + 1-3% equity
Series B+: $375k-$600k cash + 0.5-1.5% equity
What You Get
- 40+ hours/week of dedicated focus
- Full ownership of technical vision, execution, and team management
- Strategic leadership AND tactical execution
- Long-term commitment and institutional knowledge
- Represents technology in board meetings and investor conversations
Fractional CTO: Complete Cost Breakdown
Engagement Models & Pricing
Fractional CTOs typically charge monthly retainers based on time commitment:
| Engagement Type | Hours/Week | Monthly Cost | Annual Cost |
|---|---|---|---|
| Advisory | 5-10 hours | $5k-$8k | $60k-$96k |
| Standard | 10-15 hours | $9k-$12k | $108k-$144k |
| Intensive | 15-25 hours | $13k-$18k | $156k-$216k |
Alternative: Hourly Rates
Some fractional CTOs offer hourly arrangements:
- Mid-level fractional CTO: $150-$200/hour
- Senior fractional CTO: $200-$300/hour
- Specialized domain expert: $250-$400/hour
Note: Retainers are more common and usually provide better value than hourly for ongoing engagements.
Hidden Costs & Considerations
- No equity: Fractional CTOs are cash-compensated (occasionally small equity grants at very early stage)
- No benefits/payroll taxes: They're contractors, not employees
- Minimal onboarding: Experienced fractional CTOs get up to speed in 2-4 weeks
- Shared availability: They typically work with 2-4 companies, so you don't have 24/7 access
Total Annual Cost: Fractional CTO
Advisory engagement: $60k-$96k (5-10 hrs/week)
Standard engagement: $108k-$144k (10-15 hrs/week)
Intensive engagement: $156k-$216k (15-25 hrs/week)
What You Get
- Strategic technical leadership without full-time commitment
- Access to seasoned expertise (most fractional CTOs have 15+ years experience)
- Flexible time commitment that can scale up/down
- No equity dilution
- Cross-pollination of ideas from working with multiple companies
What You Don't Get
- Daily tactical execution or project management
- Full-time availability for urgent issues
- Deep institutional knowledge over many years
- Hands-on team management (though they can provide leadership and 1-on-1s)
Technical Consultant: Complete Cost Breakdown
Engagement Models & Pricing
Technical consultants work on specific projects with defined scopes:
| Project Type | Typical Duration | Hourly Rate | Project Cost |
|---|---|---|---|
| Architecture Review | 1-2 weeks | $150-$250/hr | $6k-$20k |
| Technical Audit | 2-3 weeks | $150-$250/hr | $12k-$30k |
| Tech Stack Selection | 1-2 weeks | $150-$250/hr | $6k-$15k |
| Security Assessment | 2-4 weeks | $200-$300/hr | $16k-$48k |
| Due Diligence Prep | 3-4 weeks | $150-$250/hr | $18k-$40k |
What You Get
- Deep expertise on specific technical domains
- Deliverables-focused (reports, recommendations, implementation plans)
- No ongoing commitment after project completion
- Outside perspective and cross-industry best practices
What You Don't Get
- Ongoing strategic leadership
- Accountability for execution after recommendations
- Relationship continuity (they deliver and leave)
- Deep understanding of your business context
Side-by-Side Cost & Value Comparison
| Dimension | Full-Time CTO | Fractional CTO | Technical Consultant |
|---|---|---|---|
| Annual Cash Cost | $230k-$600k | $60k-$216k | $0-$100k (project-based) |
| Equity | 0.5-5% | 0-0.5% (rare) | None |
| Time Commitment | 40+ hrs/week | 5-25 hrs/week | Project duration only |
| Strategic Leadership | ✅ Full ownership | ✅ Strategic only | ⚠️ Recommendations only |
| Tactical Execution | ✅ Yes | ❌ Limited | ❌ No |
| Team Management | ✅ Full management | ⚠️ Leadership, not daily mgmt | ❌ No |
| Accountability | ✅ Full outcomes | ✅ Strategic outcomes | ⚠️ Deliverables only |
| Flexibility | ❌ Long-term commitment | ✅ Scale up/down easily | ✅ Project-by-project |
| Best For | Series A+, 10+ engineers | Pre-seed to Seed, 0-10 eng | Specific technical projects |
Which Option Is Right for You?
Choose Full-Time CTO When:
- Team size: 10+ engineers who need daily leadership and coordination
- Funding stage: Series A or later with $5M+ raised
- Technical complexity: Significant technical challenges requiring full-time executive attention
- Strategic importance: Technology is central to competitive differentiation
- Board representation: Investors expect technical leadership at the executive table
Choose Fractional CTO When:
- Team size: 0-10 engineers, or strong VP Engineering handling day-to-day
- Funding stage: Pre-seed to Seed ($0-$5M raised)
- Strategic needs: You need technical strategy but not 40 hours/week of tactical execution
- Budget constraints: Can't justify $200k+ salary yet
- Transition planning: Preparing to hire full-time CTO in 6-12 months
Choose Technical Consultant When:
- Specific project: Architecture review, security audit, tech stack selection
- Time-bound need: Preparing for technical due diligence, compliance certification
- Domain expertise gap: Need specialized knowledge (e.g., AI/ML, security, scalability)
- Second opinion: Validating internal technical decisions before committing
Decision Matrix by Stage
| Company Stage | Team Size | Recommended Option | Alternative |
|---|---|---|---|
| Pre-seed | 0-2 engineers | Fractional CTO (advisory) | Technical advisor + consultants |
| Seed | 3-8 engineers | Fractional CTO (standard) | Full-time if tech-centric |
| Series A | 8-15 engineers | Full-time CTO | VP Eng + Fractional CTO |
| Series B+ | 15+ engineers | Full-time CTO + VP Eng | Consultants for specialized needs |
Making the Transition
From No Technical Leadership → Fractional CTO
Timeline: 2-4 weeks to onboard
Process:
- Define scope: What decisions need CTO input? How many hours/week?
- Interview 3-5 candidates (look for relevant experience, communication skills, availability)
- Start with trial engagement (90-day audit or assessment)
- Convert to ongoing retainer if fit is good
From Fractional CTO → Full-Time CTO
Timeline: 3-6 months (recruiting + onboarding)
Process:
- Have fractional CTO help define role, write job description, and create hiring criteria
- Fractional CTO participates in technical interviews and evaluation
- 3-6 month transition period where fractional CTO works alongside new CTO
- Fractional CTO phases out as new CTO ramps up
From Consultant Projects → Fractional CTO
Timeline: Often a natural evolution
Process:
- Start with specific project (audit, architecture review)
- If consultant adds value and you need ongoing support, propose retainer
- Convert hourly/project relationship to monthly retainer
Common Questions About CTO Options
At what company stage should I hire a full-time CTO?
Most companies hire their first full-time CTO between Series A and Series B, typically when they have 10+ engineers, $5M+ in ARR, or complex technical challenges requiring daily executive attention. Pre-Series A, a fractional CTO or strong VP Engineering often provides better value.
Can a fractional CTO replace a full-time CTO indefinitely?
For some companies, yes. If your team is lean (under 10 engineers) and technical challenges are primarily strategic (not operational), a fractional CTO can work long-term. However, most companies eventually need full-time leadership as they scale past $10M ARR or 15+ engineers.
How do I transition from fractional to full-time CTO?
Three common paths: (1) Convert your fractional CTO to full-time if they're interested and qualified for the next stage, (2) Have fractional CTO help recruit and transition to their replacement, (3) Promote a senior engineer to VP Engineering while fractional CTO provides strategic oversight during transition.
What if I hire a full-time CTO too early?
Common risks: burning cash on executive salary before you have product-market fit, hiring someone whose strength is scaling (not scrappy early-stage building), or creating exec overhead that slows decision-making. Better to wait until strategic technical needs consistently exceed 20 hours/week.
Should I give equity to a fractional CTO?
Usually no. Fractional CTOs are compensated with cash (retainer or hourly). Some early-stage companies offer small equity grants (0.25-1%) if the fractional CTO is taking reduced cash compensation or joining at high-risk stages. Equity should reflect commitment level—fractional is part-time, so compensation should be primarily cash.
Can I hire a technical consultant for strategic decisions?
Consultants are great for specific projects (architecture review, tech stack selection, vendor evaluation) but less effective for ongoing strategic leadership. They deliver recommendations and leave—you need internal ownership to execute. Use consultants for time-bound projects, fractional CTOs for sustained leadership.
What's the difference between a fractional CTO and a technical advisor?
Technical advisors provide lightweight guidance (1-5 hours/month, usually equity-compensated) and aren't accountable for outcomes. Fractional CTOs provide hands-on leadership (10-20 hours/week, cash-compensated) and own technical roadmap and outcomes. Advisors = mentorship, Fractional CTOs = execution.
How do I evaluate if a full-time CTO candidate is worth $250k+ salary?
Look for: (1) track record scaling teams from your current size to 3-5x larger, (2) experience raising funding (technical due diligence, investor pitch), (3) domain expertise relevant to your market, (4) culture fit with founders. Bad fit signals: most recent role was at much larger company, weak communication skills, or purely hands-on engineering focus.
Making Your Decision
Use this checklist to determine which option fits your current needs:
Current State Assessment
- How many engineers do you have? (0-2, 3-8, 8-15, 15+)
- What's your funding stage? (Pre-seed, Seed, Series A, Series B+)
- What's your monthly burn rate? (Can you afford $200k+ salary?)
- How complex are your technical challenges? (Strategic only vs daily tactical needs)
- Do you have strong technical leadership already? (VP Eng, senior architect)
Decision Rules
If team < 10 AND funding < $5M: Start with fractional CTO
If team 10-15 OR Series A+: Consider full-time CTO
If team 15+ AND Series B+: Hire full-time CTO + VP Engineering
For specific projects: Use consultants
Need help choosing the right CTO model?
Start with a focused audit to map your stage, budget, and technical priorities to the right leadership setup.
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