Fractional Executives: A Force Multiplier for Startups and a Potential Career Path
How this little-known role can be a unique opportunity for both companies and job-seekers
Note from Deb: From time to time, I get guest writers to share their perspectives on topics I am less familiar with. My friend, Ha, became a fractional executive a year and a half ago. This is something I knew little about, so she offered to be a guest to share her perspective as both a fractional executive and someone who has worked at a number of startups. She also gives advice to those who want to explore this career path.
Tell me if this sounds familiar. You’re a startup founder or CEO juggling a million things—hiring, strategy, product development, fundraising, team building, etc. To raise your next round, you need to grow, and in order to grow, you need people to build and scale the business. But cash is scarce, and given the state of today’s tech environment, you’re facing a funding crunch.
Alternatively, picture this: You are a senior leader looking for an opportunity to contribute to an early-stage company. You have a lot to bring to the table, and you’re itching to help shape the future of a startup, but you don’t want to be locked into an executive role at the same company for the next three to five years.
What’s your next step?
I would argue that one of the top things you can do to get your startup on the right track is to hire fractional executives, particularly in areas where you are experiencing pain or missing key hires. Similarly, if you’re an individual with the skills to step into an open role and help founders and CEOs solve important problems, becoming a fractional executive might also be the right move for you. In this post, I’m going to make the case for why.
With over 20 years of deep operating experience as a VP of Product, CXO, and COO, I've seen it all: the dizzying scale-ups (Stella & Dot, Swimply), the near-death experiences (Oodle), the failed startups (Keaton Row), and the dazzling exits (eBay, Betfair). I’ve also had the privilege of spending five years in venture capital, observing patterns across multiple portfolio companies. Almost two years ago, I made the decision to move into full-time consulting, where I could help a small number of mission-driven and values-aligned founders build and scale world-changing startups. I decided to become a Fractional COO and advisor to startup CEOs. My goal: to become their force multiplier.
A few months ago, my friend Deb Liu shared my fractional journey on her Substack. The post piqued the interest of many seasoned executives who were intrigued by my path to the fractional world. What I’ve witnessed since then is an increased demand-supply imbalance: a growing number of fractional executives, but not enough fractional hiring. This is likely because many startup founders and CEOs are still of the mindset that they can only grow their companies by hiring full-time employees who are 100% dedicated to the business.
This is a shortsighted view. If you’re a founder or CEO trying to decide between making a full-time executive hire or engaging an experienced fractional consultant, you should strongly consider going the fractional route.
The benefits of hiring a seasoned fractional executive are multifold: access to expertise on-demand, the ability to drive immediate impact, reduced cost, minimal hiring risk, expert guidance at crucial moments, and (sometimes) access to a valuable network. Likewise, if you have strong leadership skills and an urge to help scale a company but aren’t ready to commit to being a full-time executive at a single organization, going fractional can be the best of both worlds.
Let’s break it down.
World-class experience on demand
The case for companies
Founders often bring on full-time executives because they want to benefit from specialization and dedication. But this comes with a trade-off: When you hire a full-time executive, you are limited to that person's experiences and skillset.
In contrast, a fractional executive has likely already operated across multiple companies at various stages, all with diverse business models. Many, like myself, have indeed seen it all (or at least seen a lot of it). This allows us to pull from a vast toolkit of best practices and approaches, customized to a founder’s specific challenges and needs.
Having had so many "tours of duty” as an executive and operator—specifically, five executive roles reporting directly to CEOs—I can often achieve in a few months what might take a full-time hire a year or more to learn and do. For example, I was able to double one of my founders’ businesses in four months, while it took her full-time growth and sales team close to a year to match this number.
How was I able to do this? I had previously led growth at multiple startups and had seen and executed the playbook multiple times before. This has given me the insight, experience, intuition, and expertise to understand what a founder should do—and how to do it.
My past experience as a venture capitalist, where I got a bird’s-eye view of dozens of companies, has given me another unique advantage. I’ve created and reviewed hundreds of fundraising decks, board decks, and product and growth plans across a variety of organizations. Because I often work simultaneously with multiple companies, I’m also able to get a holistic view of the market, see the latest trends, gain insight into the newest and best tools and tech stack, and pass on those learnings.
The case for executives
Going this route has benefits for the executive, as well. If you’ve had experience at multiple organizations, especially in leadership roles, you can shop those skills out to companies at exactly the time when they need them the most. As a result, you’re able to make a tangible impact without needing to go “all in” and be locked into one company for several years.
As a fractional leader, you get to be involved in a wide range of projects at a wide range of companies. The more of those experiences you get, the more useful skills you’ll develop—and the more fractional opportunities you’ll be equipped to take on. In this sense, going the fractional route becomes a force multiplier for you, too.
Avoiding costly mistakes
The case for companies
Still not convinced? Let’s talk about numbers.
In my experience, founders tend to make one of two mistakes with full-time hires. Either:
1) They hire too junior (because that’s what they can afford), or
2) They hire too senior (before they can afford it)
Each of these has pitfalls. Hiring too junior may end up costing founders their time as they’re forced to coach, provide feedback, or—gasp!— spend cycles re-doing work.
On the other hand, when founders hire too senior, affordability becomes a challenge. A more senior executive may not always be able to fly at the right altitude for the current stage of the business. They may be too strategic and high-level and are no longer willing to fly low, roll up their sleeves, and do the very manual and detailed work that young companies need. These senior hires often come from mature organizations, meaning they’re used to planning and delegating and typically have a lot more resources than early-stage, scrappy startups. Poor outcomes occur when they aren’t able to achieve ten times the results with limited resources, ultimately becoming a cash drain on the business. And because it tends to be extremely difficult and expensive to exit a full-time executive, you’re looking at even higher costs.
The solution? Forget full-time and hire a fractional executive instead. Hiring a full-time COO or VP-level executive can easily cost $300k+ in salary, bonuses, and benefits. It can also be expensive equity (1-3%, depending on the stage). On the other hand, for a fractional consultant, the fee might be 25-50% of that all-in number (typically $500-$2,000/day), since you are hiring fractionally (part-time).
The benefits don’t end there. Onboarding a full-time executive hire typically costs around 1-3 months of salary. That’s all money you save with a fractional, on top of what you would otherwise be spending on a full-time hire’s non-productive hours (time spent attending recurring meetings, coordinating, and managing teams). Add on what you’re saving on benefits, vacation time, and employer payroll tax, and you can easily save $100k+ a year—while still producing the same output as a full-time hire (or better).
The case for executives
Of course, if you’re considering becoming a fractional leader, this is a tradeoff you’ll have to weigh. Benefits and equity can be major deciding factors in taking a role, and a guaranteed salary can provide some reassurance if you’re willing to make a full-time commitment. But if you’re open to other working arrangements, you also benefit from that same flexibility, as well as the knowledge that your time will be spent only on what’s productive. (This can be a great motivator!) And for the top 5-10% of fractional executives, your income can easily surpass what you were making as a full-time executive, especially as you develop multiple income streams (e.g. fractional, advisory, paid speaking engagements, teaching, writing and more). I call this building a portfolio career and I’ll write more about this in a future blog post.
Built-in mentorship
The case for companies
As frustrating as this might be for startup teams to hear, founders are often more willing to listen to feedback and counsel from an outside advisor than directly from their own teams. In my fractional work, I often find myself becoming the “CEO whisperer” after spending some time getting to know my founders and their businesses. This is when I can more heavily lean into being a strategic advisor, mentor, and coach, sharing new perspectives on the business for founders who are too close to their companies to see the forest through the trees. By reflecting on this feedback, founders are often better equipped to make the necessary course corrections and steer their startups in a better direction.
The case for executives
Giving advice and feedback can be troublesome when you’re a leader embedded in an organization for the exact same reasons. Even if you can identify exactly what’s wrong, that feedback may fall on deaf ears when leadership is too close to the problem. When you come in as an outsider, you’ll likely find that founders are more receptive.
Once we’ve established trust, I’m often able to give unvarnished feedback to my founders—feedback that their teams might not be as comfortable sharing. (I call this “delivering the red pill.”) I am not shy about telling my founders they are focusing too much on growth over retention, pointing out what parts of the business are not working, or even providing direct counsel on which executives and team members aren’t the right fit for their stage of the business.
I view it as my role and duty to be a truth-teller and not a people-pleaser. This is a style that founders and CEOs need to be comfortable with when working with me. Fortunately, the most competent and confident leaders welcome this type of feedback. (I’ll share more on delivering “red pill” feedback in a future blog post.)
Finding the right fit
The case for companies
If you’ve ever had to fire an executive, you know how awful it can be: the pain, the cost, the distraction, and the impact on the team and morale. Bringing on a fractional consultant carries far less risk, allowing you to accurately scope and size-check the relationship from the start. If it’s not an ideal fit, you can part ways without fallout or complicated terminations.
The case for executives
That being said, “fractional” doesn’t always have to mean “short-term.” This can be a plus for founders, but it can also be an upside for fractional executives looking for longer-term engagements.
I started my fractional consulting practice a year and a half ago, and I was privileged to work with three incredible mission-driven and values-aligned founders from the start. I still work with those three founders today, but my role has evolved for each one based on their needs. For one of my founders, I’ve increased the initial scope of my role given the growing needs of the business and my ability to drive impact across multiple areas. For another, my role pivoted from coaching on operational excellence to becoming a key part of their growth efforts. For the third, I’ve moved into a role as a strategic advisor rather than a fractional executive to reduce the company’s burn and preserve cash before their next funding round. There’s a level of customizability in the role that lets me tailor my services to my founders’ needs while saving them the worry about what happens if it stops being the right fit.
BONUS: Access to a broader network
The case for companies
In my 25 years in Silicon Valley, I’ve built an incredible network of seasoned executives, operators, and investors. Having spent the last ten years as a community builder, I’ve also built up significant credibility within that network.
I often find myself tapping into these connections to help the founders I support grow their businesses. I’ve helped founders close fundraising rounds by introducing them to VCs, strengthened their cap tables with value-add angels from my network, and made intros to some of the best BD/partnerships, growth, product, finance, and HR experts in the business.
As an evangelist for my founders’ companies, I have also played a key role in their growth stories by introducing them to prospective customers and other key partners. When I reach out to people on behalf of the companies that I’m advising and supporting, they always reply to my emails or pick up the phone and say, “Hi, Ha! How can I help?” I’ve often been told something along the lines of, “If you’re vouching for this, Ha, I’m in!”
The case for executives
Becoming a fractional executive can also help you build more connections, no matter how big your existing network is. It can be easy for networking to fall by the wayside when you’re full-time at a company, but as a fractional leader, networking becomes a key part of growing your practice. (I also talked about this in my earlier post.) Putting yourself out there is how you gain clients, and it’s in your best interest to have a thriving network to draw on when you need to.
As an added bonus, shorter-term engagements expose you to a much more diverse set of potential connections than you would naturally get in a three-to-five-year stint at a single company. What you do with those connections is up to you, but if you’re thoughtful with your relationship-building, you have a chance to gain serious momentum. (I share some other networking tips in another guest post I did for Perspectives!)
Hiring to grow a business can often feel constraining, but it doesn’t have to be. For startups looking to scale quickly and efficiently, hiring a fractional consultant can be a game-changer, bringing cost savings, flexibility, and access to specialized expertise (and, in some cases, a strong network). More often than not, these benefits make a fractional executive a more attractive alternative to hiring someone full-time, especially for early-stage founders.
Likewise, if you’re a leader with something to give and a drive to help founders scale and solve problems, becoming a fractional executive can be a way to share those skills with growing companies—without getting locked into a multi-year commitment.
The next time you're considering hiring an executive (or becoming one!), consider going the fractional route instead. Take it from me, and the many founders my business partner, Garrett Kelly, and I have worked with over the past year: It may just be the smartest move you’ve made yet. 🙌
Ha Nguyen is a Managing Partner of NextStep Advisory and Consulting. She and her partner Garrett Kelly have over three decades of experience building and investing in fast-growth venture-backed startups. They’re now combining their knowledge and expertise to support the next generation of early-stage founders, helping them take the NextStep to becoming master operators, company builders, and people leaders. If you’re a founder or executive struggling to set strategy, hit targets, or align your teams around performance and outcomes, please email us at ha@nextstepfwd.com or garrett@nextstepfwd.com.
We’d love to talk with you about some of the challenges you and your teams are facing and see how we can help!
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