When Should a SaaS Startup Hire a Fractional CFO?

The Short Answer

Hire a fractional CFO when your finances are becoming a bottleneck — slowing growth, creating risk with investors, or taking up too much of your time as a founder.

For most SaaS startups in the UK, that point arrives somewhere between £300K and £1M ARR, or when you start preparing for a funding round.

5 Clear Signals You Are Ready

1. You are preparing to raise money

Investors will scrutinise your financial model, MRR schedule, unit economics, and assumptions. If your numbers are not clean and investor-ready, a fractional CFO will fix that before it costs you a term sheet.

2. Your financial data is messy or unreliable

If you are not confident in your numbers, you are making decisions in the dark. A fractional CFO cleans up your chart of accounts, fixes revenue recognition, and gives you a single source of financial truth.

3. You are spending too much time on finance

Founders should focus on product, customers, and growth. If you are spending hours every month on spreadsheets and investor updates — that is a fractional CFO’s job, not yours.

4. You have investors or a board expecting proper reporting

Board packs and investor updates require structure and consistency that most founders do not have time to maintain. A fractional CFO owns that process.

5. You are planning an exit in the next 2–3 years

Exit preparation starts years before the deal. Clean financials, a clear data room, and strong unit economics all take time to build. Start early.

ARR Thresholds as a Guide

• Under £300K ARR: You probably need a good bookkeeper and accountant. A fractional CFO may be premature unless you are fundraising.
• £300K–£1M ARR: Sweet spot for bringing in a fractional CFO. Your finances are becoming complex.
• £1M–£5M ARR: A fractional CFO is essential. You likely have investors, a team, and reporting obligations.
• £5M+ ARR: You may still benefit from fractional, but start thinking about whether a full-time hire makes sense.

What Happens If You Wait Too Long?

The most common consequence: discovering your financial data is not investor-ready right before a funding round — when there is no time to fix it cleanly. Most founders say the same thing: “I wish I had done this sooner.”

Frequently Asked Questions

Do I need a fractional CFO before my first funding round?

Yes — ideally 3–6 months before. You need time to build the financial model, clean up your data, and prepare your data room. Doing this during active investor conversations is extremely stressful.

Can a fractional CFO help a pre-revenue startup?

It depends. If you are raising a pre-seed round, a fractional CFO can help build the model. But for most pre-revenue startups, it is too early for a full retainer engagement.

Written by Constantin Botnari, Chartered Accountant & Fractional CFO for SaaS, AI and tech founders in London & UK. Connect on LinkedIn.