A non-technical founder facing a build decision usually frames it as a hiring question: who do I bring on? That framing skips a prior question, which is whether you need a permanent technical partner, temporary technical judgment, or just hands to build something you've already specified. Those are three different needs, and each one maps to a different one of these three options.
These figures are estimates for planning purposes and are not tax, accounting or legal advice. Confirm the numbers for your own situation with your accountant or counsel.
What each one actually is
Technical co-founder. A permanent, equity-holding partner who owns technical direction for the life of the company. This is the right call when the product itself is the technical risk, when the company's defensibility depends on engineering decisions made early and owned long-term. It is also the hardest and slowest of the three to get right: a bad technical co-founder match is a multi-year problem, not a contract you can end.
Fractional CTO. Senior technical judgment, bought part-time, usually without equity or with a small equity component. A fractional CTO makes architecture calls, evaluates and manages engineering hires or vendors, and is accountable for technical decisions, without being in the business full-time or for the company's life. This fits a founder who needs real technical leadership but doesn't have (or doesn't yet need) a full-time technical executive.
Dev shop. An agency or contract team that builds what you specify, for a fee, on a defined scope. A dev shop executes. It generally does not own technical strategy, evaluate whether your product decisions are sound, or stay accountable for the codebase after the contract ends. This is the right tool when you already know what needs to be built and the risk is execution capacity, not technical direction.
What each one costs
Technical co-founder: paid in equity, not cash, which makes it look free and makes it the most expensive option if the company succeeds. Early co-founder equity splits vary widely by timing, contribution, and negotiation, commonly landing anywhere from single digits to 20 percent or more for a true technical co-founder joining at the idea stage. There's no clean market rate here; it's negotiated case by case, and getting it wrong (too little, resentment later; too much, diluted ownership you can't undo) is a common early mistake.
Fractional CTO: commonly $8,000 to $15,000 a month for meaningful weekly hours, or roughly $150 to $300 an hour depending on scope and experience. Annualized, that's typically $96,000 to $180,000. The full-time comparison depends heavily on stage, and this is where most published comparisons overstate the gap: Kruze's payroll data across hundreds of venture-backed companies puts the average startup CTO base at $167,000, breaking down to roughly $155,000 at seed and $196,000 at Series A. The $300,000-plus figures you'll see quoted reflect established companies, where Salary.com's median base is $309,872. If you're pre-Series B, compare against the lower numbers, not the headline ones. Most fractional CTOs work flat monthly retainers rather than hourly billing, since hourly billing pushes both sides toward tracking minutes instead of outcomes.
Dev shop: priced by project or by hour. Clutch's marketplace data puts the average US development firm at $50 to $99 an hour, with senior boutique teams and large consultancies running $150 to $300 and up. Rates below that are usually offshore or junior. Project totals vary too widely to benchmark honestly, which is worth knowing before you treat any published range as a reference point. A quote is a function of how tightly the scope is defined more than of the team's rate, and in our experience the same brief sent to several shops comes back with a spread wide enough that the quotes aren't really comparable. Ask what's excluded, because ongoing maintenance, infrastructure and third-party API costs usually are.
The question that actually decides it
Ask whether the risk in front of you is a technical-direction risk or an execution-capacity risk. If you don't know what should be built, or the technical architecture itself is the product's core bet, you need judgment: a fractional CTO at minimum, a technical co-founder if the company's whole defensibility rests on engineering decisions made now and owned for years. If you already know what to build and just need it built, a dev shop solves that directly and is usually the cheapest, fastest path, provided someone, you or an advisor, can evaluate whether the output is any good.
The costliest mistake we see isn't picking the wrong option, it's skipping the judgment layer entirely: hiring a dev shop to build something nobody vetted for technical soundness, then discovering months later that the architecture can't scale. A fractional CTO evaluating a dev shop's output is often the cheapest insurance available against that outcome.
Work out whether what's in front of you is a technical-direction risk or an execution-capacity risk before you talk to anyone. If you can't specify what should be built, no dev shop quote is meaningful yet, and the cheapest version of this mistake is paying someone to build the wrong thing competently.