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.
Go deeper
Related terms
Also in Starting Up
See how founders actually handle this on Money, pricing and metrics, part of the Starting Up hub.
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