The title says CFO, but the job looks nothing like the corporate finance executive you might imagine. No mahogany desk. No army of analysts. No quarterly earnings calls. A fractional CFO for a startup operates more like a financial co-pilot—someone who brings experienced judgment to decisions you’re making for the first time while keeping the company from running out of money.
Understanding what a fractional CFO actually does helps you evaluate whether you need one and what to expect if you hire one. The role spans everything from building your first real financial model to coaching you through investor negotiations. The common thread: translating financial complexity into decisions that move the business forward.
According to First Round Capital’s State of Startups report, financial mismanagement ranks among the top five reasons startups fail—and most of those failures were preventable with basic financial infrastructure. A fractional CFO builds that infrastructure before problems become fatal.
This guide breaks down exactly what a fractional CFO does for startups at different stages, which activities consume most of their time, and how to know if your startup is ready for one.
The Core Functions: What Takes Up a Fractional CFO’s Time
A fractional CFO’s work for startups clusters into several core areas. The mix shifts based on your stage and immediate needs, but these functions form the foundation.
Financial modeling and forecasting consumes significant time, especially early in the engagement. Your fractional CFO builds models that project revenue, expenses, cash flow, and headcount under various scenarios. These aren’t academic exercises—they answer concrete questions. Can we afford this hire? How long until we need to raise again? What happens if growth slows 20%?
Good startup models balance detail with flexibility. They’re sophisticated enough to capture real business dynamics but simple enough to update quickly as assumptions change. A fractional CFO who’s built models for dozens of startups knows which complexity adds value and which just creates maintenance burden.
Cash flow management and runway tracking prevents the crisis that kills more startups than any other. Your CFO maintains a rolling 13-week cash flow forecast showing exactly when money comes in and goes out. They calculate runway under current burn and model how various decisions affect it. When runway drops below six months, they raise alarms before the situation becomes desperate.
This function sounds simple but requires constant attention. Cash flow at startups is lumpy—big customer payments, quarterly vendor bills, payroll timing, and unexpected expenses all create volatility that aggregate runway numbers don’t capture.
Fundraising preparation and support is often what triggers startups to engage a fractional CFO in the first place. The work includes building investor-ready financial models, creating data rooms, preparing metric summaries, coaching founders on financial presentations, and supporting due diligence when term sheets arrive.
Experienced fractional CFOs have seen what investors ask for and how they evaluate opportunities. They help you present your startup’s financial story in terms investors understand and respect. This pattern recognition—knowing what questions are coming and preparing answers in advance—accelerates fundraising significantly.
Board and investor reporting establishes the communication rhythm that professional investors expect. Your CFO creates board deck templates, defines KPI frameworks, and ensures reporting happens consistently. They often attend board meetings to present financials and field questions, adding credibility that founders presenting their own numbers may lack.
Strategic financial analysis answers the questions that keep founders up at night. Should we raise prices or focus on volume? Is this customer segment actually profitable? Can we afford to expand to a new market? What’s the right sales team size given our targets? These decisions benefit from financial modeling that connects choices to outcomes.
What a Fractional CFO Does by Startup Stage
The role evolves as your startup grows. What matters at pre-seed differs from what matters approaching Series B.
Pre-seed to Seed ($0-$1M ARR)
At the earliest stages, a fractional CFO focuses on building foundational infrastructure that will scale. This includes establishing your chart of accounts properly (harder to fix later), setting up financial systems, creating your first real financial model, and ensuring books are clean enough to survive investor scrutiny.
Time allocation typically emphasizes:
- Financial model development: 30%
- Accounting infrastructure: 25%
- Cash management: 20%
- Founder coaching: 15%
- Ad-hoc analysis: 10%
At this stage, many startups don’t need ongoing CFO support. A project engagement to build infrastructure, followed by periodic check-ins, often suffices until complexity increases.
Seed to Series A ($1M-$5M ARR)
This stage introduces real complexity. You have actual revenue to recognize, a team to pay, and metrics investors will scrutinize. A fractional CFO becomes more valuable as the consequences of financial mistakes grow.
Time allocation shifts toward:
- Fundraising preparation: 30%
- Board reporting: 20%
- Financial modeling: 20%
- Cash and runway management: 15%
- Strategic analysis: 15%
The fundraising emphasis reflects reality—Series A preparation consumes enormous CFO bandwidth. Building the model, pressure-testing assumptions, preparing for diligence, and supporting negotiations can dominate the engagement for months.
Series A to Series B ($5M-$15M ARR)
Post-Series A, you have a board with expectations, investors watching metrics, and enough complexity to require continuous financial attention. The fractional CFO role becomes a genuine strategic partnership.
Time allocation matures to:
- Strategic planning and analysis: 25%
- Board and investor relations: 25%
- Team development and oversight: 20%
- Cash and treasury management: 15%
- Fundraising preparation: 15%
At this stage, you may also have finance team members—a bookkeeper, maybe a controller—who need oversight. Your fractional CFO provides the senior guidance that ensures these team members work effectively.
Fractional CFO Activities Breakdown
| Activity | Description | Time Investment |
|---|---|---|
| Financial modeling | Building and maintaining projections, scenario analysis | 15-25% |
| Cash management | Runway tracking, 13-week forecasts, treasury | 10-20% |
| Fundraising support | Data rooms, investor materials, diligence, negotiations | 20-40% (when active) |
| Board reporting | Deck preparation, KPI tracking, meeting attendance | 15-20% |
| Strategic analysis | Pricing, hiring, market expansion, profitability analysis | 10-20% |
| Accounting oversight | Reviewing books, ensuring accuracy, managing team | 10-15% |
| Founder coaching | Financial education, investor prep, decision support | 5-10% |
What a Fractional CFO Doesn’t Do
Understanding boundaries prevents misaligned expectations.
Day-to-day bookkeeping falls below CFO-level work. Your fractional CFO oversees bookkeeping and ensures accuracy, but they don’t categorize transactions or reconcile bank accounts. You need a bookkeeper or outsourced bookkeeping service handling foundational work.
Tax preparation requires different expertise. Your CFO coordinates with tax advisors and ensures your books support tax preparation, but most don’t prepare returns themselves. Maintain your CPA relationship separately.
Full-time availability isn’t part of the model. Fractional means part-time—typically 10-25 hours weekly. If you need someone available 40+ hours, you need a different solution. Understanding this constraint helps you use fractional CFO time effectively.
Operational accounting work like processing payroll, paying bills, or managing accounts receivable sits with your accounting team or outsourced provider. Your CFO designs processes and provides oversight but doesn’t execute transactions.
Real Outcomes: What Changes After Hiring a Fractional CFO
Abstract job descriptions matter less than concrete outcomes. Here’s what actually changes when startups engage effective fractional CFO support.
You know your runway accurately. Before: checking bank balance and guessing. After: a 13-week cash forecast updated weekly, showing exactly when you need additional capital under various scenarios. This visibility changes how you make decisions.
Board meetings improve dramatically. Before: scrambling to assemble slides the night before, dreading financial questions. After: professional deck ready a week early, confident answers to any metric question, board time spent on strategy rather than clarifying numbers.
Fundraising accelerates. Before: building your model during the raise, struggling to answer investor questions, diligence revealing problems. After: investor-ready materials before first meetings, confident responses to financial questions, clean diligence that builds rather than undermines confidence.
Financial decisions have analytical support. Before: gut-feel decisions about pricing, hiring, and spending. After: models that show the financial impact of options, enabling informed choices rather than guesses.
You stop worrying about what you don’t know. Before: nagging concern that something in your finances might be wrong but uncertainty about what to check. After: someone whose job is knowing where problems might hide and checking proactively.
How to Work Effectively with a Fractional CFO
The value you extract depends partly on how you engage with your CFO.
Share context generously. Your CFO performs better when they understand your business beyond the numbers—your strategy, your concerns, your investor relationships, your personal goals. Don’t treat them as a vendor who only needs financial data. Treat them as a partner who benefits from full context.
Establish regular communication rhythm. Weekly check-ins—even 30 minutes—maintain momentum better than sporadic longer meetings. Consistent rhythm ensures nothing falls through cracks and keeps your CFO current on developments.
Ask for what you need. Fractional CFOs serve multiple clients. They won’t always anticipate what you need unless you tell them. If you want analysis on a pricing decision, ask. If you need help preparing for an investor conversation, request it. Proactive communication maximizes value.
Act on their recommendations. A CFO who identifies a problem or opportunity creates no value if you don’t act on their input. Build implementation into your operating rhythm—when your CFO recommends something, decide quickly whether you’ll do it.
Provide feedback directly. If deliverables miss the mark or communication isn’t working, say so. Good fractional CFOs welcome feedback and adjust. Suffering in silence helps no one.
When Your Startup Is Ready for a Fractional CFO
Not every startup needs one immediately. These signals suggest readiness.
You’re preparing to fundraise. If institutional fundraising is on your 6-12 month horizon, engaging a fractional CFO now allows adequate preparation time. Waiting until you’re actively raising compresses timelines dangerously.
You’ve taken institutional money. Once you have professional investors, you have reporting obligations and board expectations that benefit from CFO support. The transition from friends-and-family to institutional capital typically triggers CFO engagement.
Founders are spending significant time on finance. If financial tasks consume more than 5-10 hours of founder time monthly, delegation makes sense. Your time is better spent on activities only you can do.
You’ve passed $1M ARR. Revenue at this level introduces complexity—real revenue recognition, meaningful financial decisions, and enough scale that mistakes matter. The inflection point varies by business, but $1M ARR is a common threshold.
You’re making decisions that feel financially uncertain. If you’re guessing about pricing, hiring capacity, or runway—and those guesses feel risky—financial expertise de-risks your decisions.
For a complete analysis of timing, see our guide on when startups should hire a fractional CFO.
Frequently Asked Questions
What does a fractional CFO do for a startup?
A fractional CFO provides financial leadership including building financial models, managing cash and runway, preparing for fundraising, creating board reporting, and providing strategic analysis. They bring experienced judgment to financial decisions founders are often making for the first time. The role adapts to startup stage, emphasizing infrastructure early and strategy as companies mature.
How is a fractional CFO different from an accountant?
Accountants record historical transactions and ensure compliance. CFOs use financial information to drive future decisions. An accountant tells you what happened last month. A CFO tells you what will happen in six months and what to do about it. Startups typically need both—accountants for accurate books, CFOs for strategic guidance. Learn more about the difference between these roles.
How many hours does a fractional CFO work for a startup?
Most startup engagements involve 10-25 hours weekly, varying by stage and activity. Early-stage startups might need 10-15 hours monthly during normal periods. Companies actively fundraising often require 25-40 hours weekly. The fractional model provides flexibility to scale hours with needs.
What should a fractional CFO accomplish in the first 90 days?
Expect a financial infrastructure assessment, cleaned-up historical books if needed, a forward-looking financial model, a 13-week cash flow forecast, and initial board reporting templates. You should also have clarity on their ongoing priorities and any urgent issues identified. By day 90, the engagement should feel established and valuable.
Can a fractional CFO help my startup raise money?
Yes—fundraising support is one of the primary reasons startups engage fractional CFOs. They build investor-ready models, prepare data rooms, coach founders on financial presentations, and support due diligence. Engaging at least 90 days before actively fundraising allows adequate preparation time.
Getting the Right Support
What does a fractional CFO do for a startup? They bring financial expertise to a context where founders are often learning as they go, making decisions with insufficient information, and building something they’ve never built before. The best fractional CFOs don’t just track your numbers—they help you understand what the numbers mean and what to do about them.
The value isn’t in spreadsheets produced or reports delivered. It’s in decisions improved, disasters avoided, and founder time redirected from financial anxiety to building the business. That’s what effective fractional CFO support actually does.
GetExact provides fractional CFO services designed for startups from pre-seed through growth stage. If you’re evaluating whether CFO support makes sense for your startup, schedule a conversation to discuss your situation. We’ll help you assess whether now is the right time—and what engagement would actually look like for your specific needs.
