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Five Key Criteria for Choosing Your Fractional CFO

Chris Schwalbach  ·  April 4, 2022  ·  4 min

Last week, we had a call with a Founder transitioning away from their Fractional CFO after engaging only three months earlier. The Founder is outrageously smart and intuitive, so why was there a miss on the “fit” for the company? As we debriefed, we learned that the CFO was most recently a divisional CFO at a public company for over a decade. The Founder felt like the CFO’s ability to connect to the business model, the attention to tight cashflow management, and the ambiguity of early-stage growth created challenges. Now, the CEO is taking a brief step back to reassess.

While a Fractional CFO may not be a permanent hire to your team, the role is critical to forging a path for growth and success. Therefore, we urge anyone embarking on this process to put as equivalent effort into this process as you would with hiring someone onto your management team. And if you commit to raising the level of rigor you put behind engaging a Fractional CFO, you’ll note that the five critical criteria below really don’t differ that much compared to hiring a full-time CFO!

5 Critical Criteria 

Have they been a CFO?

While this seems like a straightforward question, you’d be surprised. There are plenty of Fractional CFOs out there who haven’t been CFOs. Remember, titles are cheap! And when we say CFO, this does not mean a VP in a big business that should be able to handle a “less sophisticated smaller company, a “divisional CFO”, or a “business unit CFO”. Instead, you want a CFO who’s owned the balance sheet and has managed cash flow (aka “making payroll”). You want a CFO who has experience managing equity, debt, and capital strategy & structure. Finally, you want a CFO who knows how to communicate with equity partners or investors.

Experience with Your Business Stage

Startups and early-stage growth companies operate differently from large private and public companies. So, just because a fractional CFO has experience running the financial division of a $250 million tech company, that experience may not translate well to your company. In large companies, CFOs spend considerable time and energy managing the effectiveness of their team. In smaller companies, CFOs are often rolling up their sleeves and doing the work. So, determine how far your fractional CFO needs to roll up their sleeves for your company and make sure your candidates fit that need.

Expertise in your Business Model

We recommend that you are critical of your Fractional CFO’s experience within your Business Model. Strong familiarity with your Business Model outweighs direct industry experience. 

Here’s why…

  • If you’re a D2C eCommerce apparel company, the CFO experience you want comes much more from understanding how to optimize D2C spend, systems, and process compared to apparel experience. Of course, apparel experience is also valuable, but it is secondary.
  • If you’re an Enterprise SaaS company, the CFO experience you want comes from understanding Enterprise sales cycles, teams, and pipeline management. Whether your SaaS product is cyber, web3, or other tech matters less.

So, before you interview, clarify your business model's critical requirements. Think about your business's key processes and metrics (e.g., job shop, subscriptions, inventory management, marketing effectiveness, etc.). Interview there!

Ask Why they are a Fractional CFO!

Is your candidate for the long haul? Have they been a Fractional CFO for some time? Are they passionate about being a Fractional CFO, or are they in transition? Is Fractional CFO’ing simply a pitstop until they find their next opportunity? Is this their core business? If another client offers them full-time, do you think they might take the job? 

Will They Achieve Your Top 3 Objectives in the Next 12-18 Months?

First, create a clear and concise list of your top near-term objectives. Second, structure the candidate interviews to focus on their Capability and Availability to deliver on those objectives. For capability, focus on candidates’ direct experience with similar projects/objectives. Go through your list one by one and look for similar experiences.  For availability, focus on candidates’ time constraints relative to your desired timelines.


The Fractional CFO (and full-stack CFO firm) is a powerful resource for high trajectory businesses. And making sure that there’s a strong fit for the company (through these five steps) helps ensure you get the most out of it. So let us know how we can help.