To hire a CTO for your start-up, first decide whether the business needs one yet, because many early companies do not. If it does, write down what the role involves, look among people you already have reason to trust, test the working relationship with a paid piece of work, and agree equity that is earned over time. A chief technology officer, or CTO, is the person who answers for every technical decision in the company. At a start-up that normally means building the first version of the product as well.
Decide whether you need a CTO yet
The deciding question is whether the technology is the product or the means of delivering it.
A food delivery service is a business made possible by technology. The parts it needs, such as ordering, payments and maps, are well understood and can be assembled by any competent team. A company whose value lies in doing something technically hard, such as a new kind of video compression, is a technology product. If the hard part fails, there is no business.
When the technology is the product, you need a CTO as a co-founder, and investors will usually expect one. When technology is the means of delivery, you have more choices:
| Option | What you get | What it costs you | Fits when |
|---|---|---|---|
| Co-founder CTO | Full-time commitment and shared risk | A large share of the company | The technology is the product |
| Part-time or fractional CTO | Senior judgement for a few days a month | A day rate or a small share | You need direction and oversight, and others will do the building |
| Senior developer as first hire | Someone who builds, and may grow into the role | A salary, perhaps with share options | The product is well understood and you can set priorities yourself |
| Software company or freelancers | A first version built to an agreed scope | A project price, and no equity | You want to test the market before making a permanent appointment |
The last option leaves nobody technical on your side of the table. It works when the scope is clear and you keep ownership of the code. Our comparison of a software company and a freelance developer covers that choice.
One check applies to every row. If the idea depends on something technically uncertain, pay an experienced engineer for a few days to say whether it can be done before you recruit anyone. Plenty of plans turn out to rest on a part that is far harder than it looks.
Write down what the role is
“CTO” covers very different jobs. At a company of three people, the CTO writes most of the code, chooses the technology, sets up hosting and interviews the first developers. At a company of fifty, the CTO manages managers and rarely opens a code editor. Candidates who have only done the second job are often a poor fit for the first.
Before speaking to anyone, write down:
- whether the person will build the product themselves, and for how long;
- how much time you need: full-time, or a set number of days;
- what you can offer in salary, equity or both;
- whether they must be in the same place as you;
- which decisions are theirs alone, and which you will make together.
Candidates will have constraints of their own. Knowing which of your terms can move saves time on both sides.
Where to look
Start with people you have reason to trust: former colleagues, people recommended by founders you know, engineers you have met through your industry. A recommendation from someone who has worked alongside the candidate is worth more than any CV.
Beyond your own network, the usual routes are founder and technology meetups, accelerator programmes, investors’ contacts and LinkedIn. Senior engineers hear from recruiters constantly, so a message that explains the problem you are solving, the stage you are at and what you are offering will do better than a job title and a promise of equity.
Working with a friend has the advantage of trust already earned. It also puts the friendship at risk, so settle the awkward questions about money, control and leaving before you start.
Assess a technical person when you are not technical
You cannot judge their code. You can still judge a good deal.
- Ask them to explain a past decision. Have them describe a technical choice they made, the alternatives and what went wrong. Explaining technology to non-technical people is a large part of a CTO’s job. If you cannot follow them in the interview, you will not follow them in the boardroom.
- Borrow an expert. Ask an experienced engineer you trust to join one interview and tell you what they think.
- Check what they have shipped. Look for someone who has taken a product from nothing to real users, and stayed to deal with the consequences.
- Speak to people they have worked with. Include someone who reported to them.
- Start with a paid trial. A few weeks spent producing a technical plan or a prototype shows you how they work, how they communicate and whether they finish.
Be cautious of a candidate who wants to build everything from scratch, who shows no curiosity about your customers, or who waves away questions about cost and time. Good early-stage CTOs prefer proven, unexciting technology and reserve their effort for the part that is specific to your business.
Agree equity, pay and ownership in writing
These points involve company law, tax and employment law. Take professional advice before making any offer.
Vesting. Equity for a CTO is normally earned over time. A common arrangement is four years with nothing earned in the first year, so that someone who leaves after a few months does not keep a large share of the company. Have this set out in a founders’ or shareholders’ agreement.
Share options. For employees, the Enterprise Management Incentives scheme, known as EMI, lets qualifying companies grant options with tax advantages. The government’s guidance lists the conditions, which include the employee working at least 25 hours a week or 75% of their working time for the company. That matters if you are considering a part-time CTO.
Ownership of the work. Everything the CTO builds must belong to the company. For an employee the contract should say so. For a contractor, an adviser or a co-founder who starts before the company exists, you need a written assignment. Our answer on who owns the source code of bespoke software explains the principle.
Accounts. The code repository, cloud hosting and domain names should be registered to the company, with more than one administrator. A CTO who holds them personally is a single point of failure, however good the relationship.
If you start without one
Many start-ups launch a first version without a CTO and appoint one when the product has customers. That is a reasonable order of events, provided you cover the gap.
Keep the first version small. Our article on the minimum viable product explains how to decide what to leave out. Have the scope written down before anyone quotes for it. And arrange some independent technical judgement: a part-time CTO who reviews the supplier’s work, or a one-off code audit before you raise money or hire, so that you know the condition of what you own. When the time comes to recruit, our guide to building a development team from new hires covers the steps after the first appointment.
Before contacting a single candidate, write one page: whether the technology is your product or your means of delivery, what the CTO would do in their first six months, and what you can offer. If that page is hard to write, the role is not yet clear enough to fill.