How to Hire a CTO for a Startup: Cost, Skills and Best Practices

Hiring a CTO is a crucial step in building a strong, technically sound business. The right CTO helps to create a core for a scalable product, enhances investment appeal, and helps attract user base. With deep technical expertise and strategic vision, a competent CTO can guide you through:

• Defining a primary tech strategy that aligns with your business goals
• Seamlessly integrating innovations within your tech environment
• Optimizing investment through careful resource allocation and strategic planning

However, how do you hire a CTO who will accomplish your unique technical needs and will become a level up to your business's future improvements?

As a software development partner with 13+ years of experience in IT, we would like to guide you through the CTO hiring journey, defining steps to find ‘the one,’ essential professional and personal traits to look for in a CTO, costs, and potential issues and efficient ways to mitigate them.

The Chief Technology Officer (CTO) is a specialist who leads your technological business. They also assist you in integrating technical and business goals, help you decide what tech solution is worth investing in, and advise you on ways to integrate it organically within your business environment.

The CTO creates the architecture of each tech solution. Software architecture acts as a blueprint for building a software product that outlines essential interactions and overall structure to represent how separate software components will work together. Besides, a CTO works closely with the development team, guiding implementation.

Anyway, the CTO hire works closely with your development team not only during infrastructure creation but also all the time. It includes checking on set task completion, engaging soft skills to promote smooth communication and mutual understanding within the team, evaluating the efficiency of the work outcomes of team members, and much more. This is performed by facilitating meetings and mentorship to identify potential pain points and areas of improvement within a team.

Before hiring a CTO, it’s vital to establish what exact specialist you need to not conflict with your business structure. There are 4 types of CTO you can consider:

• Chief innovation officer. This kind of specialist focuses on driving innovation and fostering a culture of creativity within the organization by constantly exploring new technology tendencies and pushing boundaries to create new solutions.
• Business technology officer. Works on aligning technology initiatives with the company's overall business strategy. In other words, business technology officers enable the achievement of strategic objectives through the effective use of technology
• IT operations officer. Manages the company's technology infrastructure-related operations and ensures IT systems are reliable, secure, and scalable enough to support day-to-day operations
• Business technology liaison. Bridges the technology team effort and the business side of the company by focusing on driving customer value through technology and ensuring alignment with customers' actual needs and market trends.

Generally, reasons to look for a CTO for hire vary significantly, and you may have your specific considerations and requirements. Below, we’ve gathered the most common reasons businesses decide to reach out to CTO experts based on our own cooperation experience.

The development of a tech-savvy product definitely requires strong leadership and management. A CTO ensures the right architecture, tech stack, and strategy are in place to prevent inefficiencies and unpleasant, costly mistakes. Without this expertise, businesses risk technical bottlenecks, scalability issues, and misaligned development efforts. A skilled CTO keeps the project future-proof.

Without senior technical guidance, teams usually can lose focus, resulting in workflow descriptions. A CTO structures development, target efforts, and expertise with business objectives and prevents delays. Hiring a CTO helps you decrease project timelines by 30%, enabling faster product launches.

A product that works right now may struggle to handle future growth. By hiring a CTO, you can make sure to receive a robust and scalable architecture that supports increasing user demand, integrates new features seamlessly, and lacks performance issues. This approach enables businesses to avoid downtime, poor user experiences, and last-minute fixes, which, as a result, may cost a fortune.

Investors look for more than just a promising idea – they want a solid, detailed, and prominent technology roadmap. A CTO strengthens funding pitches by demonstrating technical feasibility and long-term project performance vision. Attracting investment will become far more challenging.

Whether you plan on modernizing infrastructure, integrating AI, or shifting to cloud-based solutions keep in mind that this all requires a solid and strategic execution. A proficient CTO ensures these changes align with business needs, improve efficiency, and enhance security. Without expert guidance, digital transformation can lead to disorganized workflows, high costs, and underutilized technology.

Digital transformation now takes place among all business domains, and CTO hiring is only one aspect of adopting a digital model. Below you can examine what key benefits businesses outline from adopting a digital model within their business model:

Below we’ve complied a list of 7 comprehensive steps that’ll help you relatively structure the process of hiring a CTO for your business.

Before starting a CTO recruitment process, ask yourself, ‘What for does my business need a CTO?’. It’s an important step, as the more specifically you outline your needs and expectations, the more easily it’ll be for you to state your requirements concisely in the job description. This will significantly minimize potential confusion and enable you to avoid dealing with underqualified specialists.

Following from the previous step, clearly outline: "What does a CTO do in a startup?". It includes their key responsibilities, their reporting structure, and desired qualifications. Determine what your CTO should focus on more: tech leadership, strategic planning, or both?

Write a comprehensive job description that accurately reflects the role and expectations for the CTO position. Include details about your business, its purpose and specification, culture, as well as specific qualifications and responsibilities for the role. Particular details may differ depending on your unique needs, however here is the short list of things you should include into your CTO job description:

• Job title and short summary
• Your company description
• CTO Responsibilities
• Qualifications and requirements
• Education of certificates
• Benefits and perks (if any)
• Description of the application process

It’s always better to cooperate with a CTO who already has an extensive history of working in a domain similar to yours. For example, if your company is engaged in the healthcare field, a CTO hire with experience in logistics simply won’t be able to accomplish your demands, being unfamiliar with tech stack or regulatory compliance. To avoid that, determine the knowledge of specific technologies you seek from a candidate, experience in your or similar domains, and leadership qualities.

Once you’ve outlined your technology needs, the next step is finding an experienced CTO to drive your product’s success. Instead of limiting your search to local talent, looking for CTO expertise abroad can be more cost-effective and provide access to a broader skill set.

You can visit platforms like Clutch or Goodfirms to review suitable IT vendors and check out their past clients' feedback and each project's details. Besides, examining IT partners' portfolio may unveil their expertise of providing software services for business domains similar to yours. In general, outsourcing CTO for hire offers flexibility, cost-effectiveness, and a structured approach to scaling your tech expertise to your needs.

Cleveroad provides CTO-as-a-Service solutions tailored to your needs. With a strong background in 9 business domains, including healthcare, logistics, eCommerce, and FinTech, we’ve helped businesses make informed tech decisions, optimize development, and ensure long-term scalability. Here’s what our clients say about working with us:

You and your IT provider will identify experts who meet the required qualifications and experience. This will include conducting initial phone screenings to assess candidates' communication skills and fit with your company culture. You’ll be able to interview top candidates to delve deeper into their experience, skills, and suitability for the role.

As mentioned before, hiring a CTO is not about searching for the most tech-savvy specialist. Your candidate has to have robust leadership qualities, efficient problem-solving skills, and the ability to align with your values. Focus on individuals who are capable of inspiring and motivating the tech team and effectively collaborating with other departments if necessary.

Anyway, you can't get away from the tech part while hiring a CTO. Your IT vendor will help you administer tech assessments or coding challenges to evaluate candidates' proficiency in technologies relevant to your objective. You can also consider conducting practical exercises or simulations to check on candidates' problem-solving and decision-making skills in a real work environment.

While the CTO’s areas of responsibility are quite comprehensive, the question about skill set may still be unclear due to CTO's wide range of competencies. Discover 5 main skills required for a CTO:

It’s vital for a CTO to possess a keen understanding of the business landscape and be able to translate technological solutions into clear strategic advantages for the company. They should have a clear vision of how technology can drive your business growth, improve operational efficiency, and enhance customer experience.

A strong technology background is essential for you when hiring a CTO. They must have extensive knowledge, expertise and practical experience in various areas of technology relevant to your niche and goals. This includes understanding software development methodologies (Agile software development methodology, Waterfall, etc.), cloud computing, cybersecurity, and data analytics. Knowledge of technologies like Artificial Intelligence and Machine Learning may be a benefit too.

Effective leadership and management skills define a great CTO​​, enabling them to oversee, lead and inspire the technology team successfully. This includes the ability to motivate and mentor team members, foster a culture of collaboration and innovation, and align the team's efforts with the company's overall goals and vision. Strong leadership skills enable the CTO to build and empower high-performing teams, drive organizational change, and navigate complex challenges.

Today, the technological landscape is flashy fast, meaning your CTO must be adaptable and open to absorb new knowledge. This includes staying abreast of emerging technologies, industry trends, and best practices. The ability to quickly adapt to changes, leads the organization technological transformations, and consequently to automatizatin and workflow clarity and simplification.

No matter how well you’ve managed to establish a smooth and error-free workflow, unpredictabilities still happen. In this way, a CTO for hire has to be equipped with knowledge of how to mitigate risks in various areas, including:

• Cybersecurity threats
• Technology malfunctioning
• Privacy compliance
• Data breaches
• Hardware failures, etc.

A CTO shouldn’t be afraid of challenges and must be able to handle any situation by quickly reacting to potential risks and trying to provide the most effective solution possible.

The CTO hiring process can feel overwhelming, but we’re here to simplify it. Drawing from our experience in providing CTO-as-a-Service, we’ll guide you through common challenges and the most effective strategies to overcome them.

Hiring CTO for startup with the right tech expertise is indeed a challenge, especially if you lack a tech background. How do you ensure they can make the right architectural decisions, scale infrastructure, and maintain security? Missteps in hiring can lead to costly inefficiencies and technical debt.

Cleveroad tip: Bringing in external expertise for evaluation can help businesses make informed decisions. At Cleveroad, we pair you with seasoned and experienced tech leaders who assess system architecture, security, and scalability needs, ensuring your technical foundation is solid before committing to a full-time hire.

A CTO must do more than manage development – they need to align technology decisions with business objectives. When misalignment occurs, companies risk inefficiencies, wasted budgets, and disconnected development efforts that don’t drive growth.

Cleveroad tip: Ensuring regular communication between leadership and the CTO is key. At Cleveroad, we prioritize a business-first approach, where technology decisions directly support long-term business goals. Our CTOs help bridge the gap between strategy and execution, keeping development efforts aligned with your vision.

Hiring a CTO on a permanent basis is a major decision and is commonly not an option if company is ready for that level of commitment. If the hire doesn’t work out, it can be costly and disruptive to ongoing operations.

Cleveroad tip: Businesses can benefit from flexible leadership models that provide expertise without immediate long-term obligations. At Cleveroad, we offer flexibility in hiring, offering 3 hiring options, including full-time/part-time employment and a fractional approach, depending on your current needs. Our specialists offer strategic guidance needed to drive tech initiatives forward, allowing you to scale technical leadership as needed without the risk of unpredictable permanent hires.

The cost of hiring a Chief Technology Officer (CTO) can vary depending on several factors. Namely, they are as follows:

• Location
• Company scale
• Business domain
• Previous experience
• Qualification level

On average, the hourly rate for hiring a CTO can range from $150 to $300 or more, depending on the factors mentioned above. However, it is essential to note that these figures are estimates and can vary widely based on the individual candidate and specific circumstances.

To provide a general understanding of the salary range for CTOs in different countries, we conducted an analysis of annual CTO salaries sourced from platforms like Clutch. Here is a compiled table showcasing the approximate annual CTO salaries across various regions:

Cleveroad is a trusted software development partner with 13+ years of experience in delivering high-quality digital solutions. Alongside custom web and mobile development, legacy software modernization, managed IT services, and AI solutions, we offer CTO as a Service to help businesses navigate complex tech challenges. Our experienced CTOs provide strategic guidance, oversee product architecture, ensure scalability, and align technology with business goals.

Here’s what benefits you’ll receive from cooperating with us:

• A team of 280+ in-house engineers (75% senior and middle level) with a proven track record of 200+ successful software projects delivered
• Project Management Office (PMO) to streamline execution, manage risks, maintain timelines, and optimize resources for a seamless development process
• ISO/IEC 27001:2013 and ISO 9001:2015 certifications, ensuring a structured approach to delivering secure, high-quality software solutions
• Expertise in advanced integrations, including APIs, cloud-based CRMs, secure payment systems, data analytics platforms, and industry-specific enterprise tools
• Strict compliance with global security and legal standards such as HIPAA, GDPR, PCI DSS, PIPEDA, FDA, and KYC, ensuring data protection and regulatory adherence
• Free solution design workshop to define goals, explore tailored strategies, and assess feasibility – completely risk-free and with no upfront financial commitment

We’d like to represent you with our recent FinTech case of providing IT staff augmentation services to Mangopay – a modular and flexible payment infrastructure provider with a headquartered in Luxembourg. Mangopay operates nine offices across Europe serving top e-commerce and retail brands like Vinted, Rakuten, Chrono24, La Redoute, and Wallapop, along with 2,500+ global platforms. In 2022, Advent International, a leading private equity firm, became their majority shareholder.

Mangopay partnered with us for IT staff augmentation services to scale their development team and bring a new product to market – FX – a comprehensive financial solution combining multi-currency pricing, e-wallets, treasury management, and global payouts. Designed for seamless money movement across platforms and marketplaces, it offers customizable solutions to fit diverse business needs. Our client operates in the FinTech domain, where they should adhere to strict KYC, AML, and EU payment regulations, so security and compliance were critical. We’ve ensured seamless adherence to these requirements while optimizing development processes.

After evaluating multiple vendors, they chose Cleveroad for our structured approach, clear communication, and skilled specialists. Initially seeking TypeScript engineers, they also benefited from adding a business analyst, streamlining planning and workflow.

As a result of cooperation with Cleveroad, our client received a high-quality fintech product. The client continues to rely on Cleveroad’s expertise, confident in our technical excellence and reliability. Our client has been partnering with us for over 3 years, communicating directly with our CTO and CSM. We provide specialists necessary for the current needs of the project upon customer’s request.

Below, you can examine a detailed video feedback provided by Kirk Donohoe, CEO of Mangopay.