Why is cash the default in this market?

A fractional product leader is not an employee with a diversified portfolio of upside, and is not a founder with a decade of runway. They are a business with two to four clients, and each client occupies a fixed share of a finite week. The Fractional Rates Index, our dataset of published prices across 736 fractional executive providers, records a median published monthly retainer floor of $5,000, with half of published floors falling between $2,500 and $8,000. Every one of those figures is cash. Equity does not appear as a published pricing unit anywhere in the dataset, which tells you how the market actually transacts.

Cash also keeps the relationship legible. You are buying outcomes, they are delivering them, and either side can end it on notice. Our own agreement carries 30 days' notice in both directions, which only works because there is nothing complicated to unwind when it is used.

What are the three structures, and when is each honest?

Three structures cover almost everything you will encounter, and each is honest inside its own boundaries. The failure mode in every case is the same: a structure sized for one level of commitment gets used to buy a different one, and the mismatch surfaces in month four rather than in the contract. Read each row below as a package of price, time and accountability, not as a price alone.

Cash retainer, no equity. The default and the majority of the market. A fixed monthly fee for a defined scope and a defined number of hours. Nothing vests, nothing needs unwinding, and the cap table stays clean. This is the right structure for essentially every engagement in which the leader is expected to own an outcome.

Advisor grant, minimal cash. Equity in exchange for a few hours a month of calls, introductions and pattern recognition. This buys perspective, not leadership, and it is honest as long as nobody pretends the advisor owns anything. The published bands are in the next section.

Hybrid: reduced cash plus options. For a serious ongoing engagement, some founders offer a reduced monthly retainer alongside an option grant vesting across the engagement. This can align incentives on a long relationship, under two conditions: the cash component still clears the executive's floor, because they have payroll too, and the equity vests with time or milestones rather than landing up front.

What does the published advisor equity standard say?

The most widely used public reference is the FAST Agreement, the Founder / Advisor Standard Template published by the Founder Institute and updated to Version 3 in July 2026. It sets equity by two variables: the company's stage and the advisor's level of engagement, with grants made as restricted stock or options vesting over a two year period. It is a published standard rather than a measurement of what the market pays, but it is the closest thing this category has to a common vocabulary, and most founders and advisors will recognise its levels.

Swipe the table sideways to compare →

Read the bottom two rows before the top two. Every level in that grid is priced for someone who meets your team monthly and takes the occasional call. None of it is priced for someone accountable for what your company ships, and a founder who offers an expert-level grant while describing an executive workload has mispriced the engagement by an order of magnitude in time, whatever the percentage says.

Why does a pure-equity arrangement fail?

The mechanism is simple and it is about attention rather than greed. A fractional leader's scarce resource is hours across clients, and cash clients book the calendar because invoices arrive monthly. The equity-only client rides along on whatever is left. Six months in, that client is getting the leftover hours, the founder is frustrated, the executive is resentful, and there is now a grant on the cap table attached to a soured relationship that somebody has to explain to the next investor. Nobody planned that outcome. The structure produced it.

There is one honest version of the all-equity conversation, and it is a different conversation. If the company genuinely cannot pay, what it needs is a co-founder rather than a fractional executive: full commitment, founder-scale equity, and a title that reflects it. Compare against the alternative structures in our guide to fractional CPO engagement models before deciding which conversation you are actually having.

Which questions surface a fair structure fast?

Four questions, asked directly, will tell you more than a week of negotiation. They work because each one converts a vague preference into a number or a date, and because a provider who cannot answer them has not thought about the structure they are proposing. Ask all four in the same conversation, and pay attention to which one produces hesitation.

• What is your cash floor for this scope? Respects that they run a business, and surfaces the real number before anyone gets attached to a structure.
• If we add equity, what does the retainer become? Tests whether the equity is genuinely priced or is decorative. A grant that changes nothing about the cash was never valued.
• What vesting schedule matches the engagement? Monthly vesting across the engagement, with a cliff matching the minimum term, is clean and self-enforcing.
• What happens to unvested equity on notice? It stops. Simple is fair, and anything more elaborate is a negotiation you will have again later.

What do we do?

Sivan Kadosh, a fractional Chief Product Officer for B2B SaaS companies between $2M and $15M ARR, works on cash: $8,000 per month for 20–25 hours, a 3-month minimum and a 6-month standard term. Notice is 30 days in either direction. The fee sits inside the $5,000–$15,000 per month range typically used for fractional CPO leadership. Hybrid structures are worth discussing for engagements running past six months, at advisor-grant scale. And when what a founder describes is a co-founder search wearing a consulting budget, we say so rather than taking the grant.

Frequently asked questions

The questions below come up once a founder has decided they want a specific person and has to write the offer. They cover what a two-day-a-week workload should be worth, whether equity carries governance rights, how interim engagements differ, and what marketplaces do about equity when they broker the relationship.

What equity is normal for a fractional CPO working two days a week?

That scope is a real executive workload rather than an advisory one, so if equity features at all it should sit alongside reduced but genuine cash, vesting across the engagement. Anchoring it to advisor bands understates it, because those bands are priced for monthly meetings. Anchoring it to founder equity overstates it, because the commitment is part-time and terminable on notice.

Should equity come with a board seat or information rights?

No, not at the scale discussed here. Advisor-scale equity carries no governance, and bundling governance into a services agreement creates an obligation that outlives the engagement. Keep the two conversations separate, and if you want the person on your board, negotiate that as a board appointment.

Does the equity question change for an interim executive?

Yes. Interim work is full-time cover for a defined gap, usually priced as cash at a higher monthly rate precisely because the timeline is too short for meaningful vesting. Our comparison of fractional and interim CPO engagements covers the structural differences in full.

What do marketplaces do about equity?

Generally they route around it. Go Fractional, for example, publishes that its fractional engagements avoid an equity hit and that operators engage as independent contractors through a statement of work, with a conversion path priced at 20% of first-year salary if you later hire the person full-time. The commercial model is cash and a fee, not a grant.

Cash for accountability, an advisor grant for advice, and a hybrid only where the engagement is long enough for vesting to mean something. The structure that fails is the one where the words say executive and the compensation says advisor.