Fractional CFO equity compensation
Fractional CFOs at pre-seed and seed typically receive 0.25% to 0.75% equity on a 2 to 4-year vest with a 3 to 6 month cliff, usually in exchange for a 25 to 50 percent cash discount. Post-Series A, equity drops to 0.10% to 0.25% and cash becomes the norm.
When equity makes sense
Offer equity when cash is scarce and the fractional executive will materially shape the fundraise or exit. Pre-seed and seed companies routinely offer equity; post-Series A companies rarely need to.
Standard ranges by stage
Pre-seed: 0.50% to 1.00% for 20+ hours per month. Seed: 0.25% to 0.75%. Series A: 0.10% to 0.35%. Series B+: 0.05% to 0.15% (usually as a top-up to cash). These assume a 2 to 4 year vest with a 3 to 6 month cliff.
Vesting and cliff
Standard is a 4-year vest with a 1-year cliff — same as employees. For fractional executives, a shorter 2-year vest with a 3 to 6 month cliff is common and defensible: the engagement itself is shorter. Include an acceleration clause on change of control.
Cash-plus-equity structures
Three common structures. Full cash, no equity: standard rate, no equity, no long-term alignment. Discounted cash plus equity: 25 to 50 percent off cash rate in exchange for the equity ranges above. Equity-heavy: 50 to 75 percent off cash in exchange for higher equity — only at pre-seed, and only for co-founder-adjacent operators.
Tax and legal
US fractional executives receive equity via a Consultant Stock Option Agreement or via NSOs. ISOs generally require employee status. 409A valuation must be current at grant. In California and Delaware, expect legal fees of $500 to $2,000 to paper the grant.
Common mistakes
Offering equity without a 409A valuation. Missing the acceleration clause. Offering employee-level equity to a part-time operator (dilutive and unnecessary). Failing to align vesting length with engagement length.
Hire a vetted fractional executive.
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Frequently asked questions
How much equity does a fractional CFO get?
0.10% to 1.00% depending on stage; 0.25% to 0.50% is the modal range at seed.
Do fractional executives get options or restricted stock?
Almost always options (NSOs). Restricted stock is rare for part-time roles.