Annual Contract Value

Also called ACV

Annual contract value: the revenue a customer contract represents per year, averaged if the deal is multi-year. A standard way to size B2B deals.

Why it matters

ACV shapes your whole go-to-market: a high ACV can support a sales team, a low one usually needs self-serve. Knowing your ACV tells you what kind of sales motion the business can afford.

For example

A customer signs a three-year deal worth 9 lakh total, so the annual contract value is 3 lakh.

Worth your time

16 More Startup Metrics Andreessen Horowitz · article A16z's reference on the metrics that matter, including how to think about contract value, bookings, and revenue cleanly. Open a16z.com →

Related terms

Go deeper

See how founders actually handle this on Money, pricing and metrics, part of the Starting Up hub.

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