What Is a Fractional CFO and Do I Need One?

If you’re looking for help with managing your cash flow, optimizing your go-to-market strategy, or maximizing your chance of a successful fundraise, hiring a Fractional Chief Financial Officer (CFO) is a good place to start.

You might be familiar with the role of a CFO, an experienced individual who leads the finances of the company using data-driven strategies. While that insight is critical even at the early stage, often hiring a full-time CFO can be overkill and expensive. That's when hiring a Fractional CFO, also known as an Outsourced CFO, can be a better option. 

What Does a Fractional CFO Do? 

A Fractional CFO manages the strategic finances at a company, including, but not limited to: 

• Creating a 3-statement financial model & annual budget 
• Managing cash flow (and burn, if applicable)
• Forecasting revenue, expenses, & cash flow 
• Identifying & tracking key performance indicators (KPIs)
• Evaluating the impact of different scenarios, including a base, bull and bear case
• Optimizing go-to-market strategy (client acquisition cost, pricing, product launch, etc.)
• Reviewing vendor contracts and offering advice during negotiations
• Supporting the creation of investor reports and board presentations
• Developing and supporting fundraising strategies

When Should You Hire a Fractional CFO? 

It's never too early to hire a Fractional CFO. Fractional CFOs work with companies across a variety of needs, including those that are at an earlier stage all the way to more established and mature  companies. Generally speaking, a good time to hire a Fractional CFO is when you want to:

• Gain visibility into the future. A Fractional CFO analyzes historical financial reports and uses their industry expertise to help forecast and model your business.
• Manage cash flow effectively. A Fractional CFO can help manage cash flow and implement cost-saving strategies.
• Raise capital. If you're preparing to raise capital, working with a Fractional CFO is usually a top priority. A Fractional CFO can help you evaluate the pros and cons of funding options, assist with pitch decks, provide investor-ready financial models, and evaluate term sheets.
• Establish scalable financial systems. A fractional CFO can suggest financial management systems and a financial stack that you can implement for sustainable growth. Getting the proper framework now could help your company save time and money later. 

How Should You Build Your Finance Team?

Like we mentioned, it’s never too early to hire a Fractional CFO. Pilot's CFO Services team works with clients across industries including: Technology, SaaS, AI, Consumer Goods & Retail, Professional Services, Healthcare, and more. The experience of a Fractional CFO can help you feel confident in the financial health and data of your company, for today and for whatever may come your way tomorrow. Pilot’s CFO team has helped companies free up to $200K in liquidity and extend runway by over 3 months. 

You can book a complimentary 1:1 session with a Pilot CFO to ask questions and get a feel for what it would be like to work with a Fractional CFO.