Most Life Sciences founders reach the same crossroads. Their scientific expertise is what drives the company forward, yet the financial and administrative workload keeps growing alongside it. At some point, that balance tips. Delegating financial responsibility is not a sign of growth; it is a prerequisite for it.
Bringing in a CFO seems like the obvious move. Someone to handle the numbers, manage shareholder communication, and work through the financing questions that pile up as the company matures. The question most founders ask next is a practical one: "Do we actually need this yet?" Cost is usually the deciding factor. A CFO who splits time across administration, investor relations, and fundraising quickly becomes an expensive resource, often more so than the company's stage can justify.
F.INSTITUTE takes a different starting point. We believe the CFO in a Life Sciences company should be freed from operational tasks entirely, focusing instead on the strategic financial decisions that determine whether the company reaches its next milestone.
What type of CFO fits a Life Sciences company?
In practice, many CFOs come from an accounting background, which shapes how they approach the role. Their natural orientation is internal: processing approvals, maintaining reporting structures, keeping costs in check. That is the CFO who looks backward, who records and controls what has already happened.
A bookkeeper captures historical transactions. A controller verifies that the records are accurate and the company remains compliant. Neither of those functions answers the questions that actually determine a Life Sciences company's trajectory:
- Which milestones must we hit to make a compelling case for the next funding round?
- Which investor profile matches where we want to take this company?
- How do we design equity compensation packages without putting the cap table at risk?
- What happens to our runway if the CRO timeline slips by six months?
- How do we manage the organization toward those milestones, and what contingency plans exist if circumstances change?
These questions do not wait for a Series A. They emerge shortly after the first pre-seed or seed capital comes in, as soon as the company commits to a development path where continued progress is the condition for follow-on funding.
Sector knowledge is not optional in Life Sciences
Life Sciences carries a specific operational profile that compounds this financial complexity. Development cycles are long. Funding structures blend grants, equity, and debt in ways that most generalist advisors have never encountered. Several outsourced processes often run in parallel, each with its own burn rate and timeline dependency. Investor reporting is milestone-driven rather than revenue-driven.
For a biotech running a clinical program, a CMC track, and a regulatory process at the same time, tracking spend at the activity level is the only way to maintain real visibility into the business. A single delay in one of those workstreams ripples directly through the runway calculation and shifts the timing of the next raise.
Beyond the modeling, the CFO needs to communicate that complexity credibly. To investors who are familiar with biotech development dynamics. To grant agencies that require detailed, structured documentation. To a board making decisions under uncertainty. Because only when the CFO understands the science and clinical relevance can he bridge the gap to the financial strategy.
"With a bank, you have to spend a long time explaining why you won't have any revenue in the first few years," says Willem Mees van der Bijl, CEO of Spatium Medical, a medtech spin-off from Erasmus MC. "With a CFO who knows the sector, that's not necessary. They've been through it before."
Why a fractional CFO fits the Life Sciences model
Over ten years of working with Life Sciences startups and scale-ups, F.INSTITUTE has developed a fractional CFO model built around one core insight: operational finance and strategic finance require fundamentally different skills, and bundling them in one role produces a CFO who does neither well.
Our approach separates the two deliberately. A fractional CFO, a senior finance partner working part-time, concentrates exclusively on the corporate finance work that demands deep expertise: financial modeling and scenario analysis, investor reporting and board representation, cap table management, term sheet review, and grant compliance across instruments such as WBSO, EIC, and Horizon Europe. Equity compensation structuring, from options to stock appreciation rights, sits in this scope as well.
The operational layer, monthly reporting cycles, rolling cash flow forecasts, budget versus actuals tracking, is handled by a dedicated support team. A full-time CFO with the profile Life Sciences companies need typically costs between €150,000 and €200,000 per year in total employment costs. For a seed-stage company managing runway carefully, that commitment rarely makes financial sense. The fractional model delivers equivalent strategic capacity at a fraction of that cost, with the flexibility to scale up or down as the company's needs shift.
Also read: Financial Model in Life Sciences
When to bring in a fractional CFO
There is no universal trigger point, but several situations reliably signal that a Life Sciences company has outgrown its current financial setup:
- A funding round above €1 million is on the horizon, where investor-grade modeling and documentation become essential.
- The board or existing investors are raising questions the founding team cannot address with confidence.
- Multiple external partners are active simultaneously and budget oversight per workstream has become difficult to maintain.
- The founder's calendar is increasingly dominated by financial administration rather than the work that only they can do.
Bringing in fractional support at these moments delivers the same strategic depth as a full-time hire, without locking in fixed overhead that a growing company cannot yet absorb.
The CFO function exists whether you fill it or not
Every Life Sciences company makes CFO-level decisions. Runway management, investor positioning, equity structure, financing strategy: these decisions happen regardless of whether there is a dedicated person responsible for them. The real question is whether the structure around those decisions is fit for the company's actual stage and complexity.
For most Life Sciences and MedTech companies operating between Seed and Series B, a fractional CFO with genuine sector experience, backed by structured operational finance support, provides the clearest path from basic financial administration to the strategic financial leadership a growing company needs to compete for capital.
Also read: The biggest financial challenges life science companies face and how to tackle them
A fractional CFO for your Life Sciences company?
If you’d like to explore this topic further and discover what F.INSTITUTE can do for your organization, please contact us. We’d be happy to discuss your goals.
