Fig. 01 · Glossary
Customer Concentration
Also known as Revenue Concentration, Account Concentration
Definition
Customer concentration measures how much revenue, gross margin, or ARR depends on the largest accounts. The common diligence cut is top-1, top-5, and top-10 customer share. Concentration is not always fatal, but buyers discount it when contracts are short, renewal risk is high, account ownership is founder-dependent, or gross margin varies by customer.
Concentration is manageable when the account is contracted, embedded, profitable, and institutionally owned. It becomes a valuation problem when the founder owns the relationship, pricing is custom, delivery is fragile, or renewal depends on a single executive sponsor.
In exit-readiness work, the fix is not only diversification. It is account governance: relationship maps, renewal calendars, executive-sponsor coverage, and documented delivery economics.
Human Renaissance glossary · operator-grade definitions · Research methodology
