The rise of fractional CFOs: Who hires them and why

Fractional CFOs—highly-experienced finance chiefs who work contractually—are increasingly in demand. But what would make a finance leader who has worked on a full-time permanent basis at multiple companies pivot to becoming a fractional CFO? It may be an opportunity to become more strategic instead of just crunching numbers.

“We’ve seen tremendous growth and appetite for [fractional CFO] services throughout 2022 and the beginning of 2023,” says Dan DeGolier, founder of Ascent CFO Solutions, a fractional CFO firm based in Boulder, Colo., that grew revenues 62% last year.  

During these uncertain times, hiring a fractional CFO on a part-time, hourly basis can be very valuable for companies, as opposed to trying to hire an experienced full-time permanent CFO with “a minimum base pay of $200,000 or $250,000, not including bonuses and benefits,” DeGolier says. “If you can get a highly experienced CFO on your team for just a day or two a week, they can really move the needle,” he says.

But what’s the value proposition for fractional CFOs? DeGolier shared his own experience.

After a more than 20-year career as a full-time CFO and in other financial leadership positions, he had an “aha moment” when taking a CFO role with a small, early-stage software company. “I was doing a lot of things besides just CFO-level work,” he says. “I was the controller, the accounting manager, and the payroll manager.” But he wanted to just focus on the strategic part of being a CFO, he says. “I thought it might be really interesting to be the CFO of multiple companies simultaneously,” DeGolier says. He pivoted to a career as a fractional CFO in 2011. “I gravitated toward the flexibility of working in different industries and with different cultures,” he explains. And the immediate wins were exciting, he says.

Jay Jung, the founder of Embarc Advisors, says he’s “always been an entrepreneur at heart” and works with startups as a fractional CFO and advises some as a consultant. His assessment was in line with DeGolier’s perspective. “Ideally, a fractional CFO should work with other management team members to drive strategy, not just closing the books and providing management reports,” says Jung, a Goldman Sachs and McKinsey alum.

Nowadays CFOs in general are becoming more of a strategic partner to the CEO and supporting the company strategy, according to McKinsey. Technology and empowering their accounting…