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Comment by geekuillaume | Hacker News Reader

I'm working on a new consultant biz, oriented toward "freelance CTO" for early-stage startups. It's general purpose but provide a non-technical client a better view of the technical aspects of their product. I'm convinced it has a lot of value for this kind of clients.

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I tried this a bit myself. You are right that you can provide tremendous value, but early-stage startups either don't have, or aren't willing to spend, the money that you deserve for the value you'd provide. Maybe there's a niche you can target that I was unaware of. Hopefully you have more success!

Seems actually a better use case for paying in stock (compared to regular employees). You only work a short time for them, so you can spread your bets more like a VC, and your influence can have a decisive impact on their success, so it's not just a lottery ticket.

Those days startups take ~10 years to get to IPO.

Even if we assume that they are willing to part with stock for consulting engagements, can you afford to wait years to get paid?

Can you afford to pay taxes on that income this year? (to you it's paper money that might never to turn into real money; to IRS it's as good as payment in cash).

Restricted and illiquid shares are rightly valued at a discount to the same shares with a liquid market, so while you pay taxes on them, it's on their fair market value (which can be low as above).

Same, this business model is broken. Tremendous value is relative to the size of the business. Nontech founder = small business = high stakes work for low absolute comp. You make way more as an actual CTO (cash, equity, whatever) because you can grow the size of the pie, often rapidly.

I'm not so sure about the lack of funding.

A number of startups really start having this issue once they start seeing some traction.

Maybe they're actively looking for new or additional senior technical leadership or just scaling the team.

Either way the opportunity is certainly there for companies to hire temporary technical leadership.

I've also done this and can agree with the parent of this comment.

The problem here is once they have traction and funding, they likely have a full-time CTO. Fractional CTOs are generally needed at the seed stage when the technical solution hasn't really come together and they don't have this skill-set in house. They also don't have money. It's a slippery slope, and you're better off being a technical advisor (low effort, low equity, low risk) than working underpaid and overworked.

This is why I decided to offer the same fractional CTO service but to focus on small cap listed companies.

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