Sammy is the Managing Director and Cofounder of Blossom Street Ventures. Email him directly at firstname.lastname@example.orgAverage Contract Value is important, but don’t obsess over it. Maximizing ACV shouldn’t be the goal and as you’ll see below, the last 38 SaaS companies to IPO had a modest median ACV of $26,985. A few observations:
ACV is a metric that should be monitored, but don’t change the way you sell in order to artificially increase it. Rather, focus on generating the most revenue you can as cash efficiently as possible. If that means optimizing for a lower ACV in order to get more deals closed, then do it.