The Valley of Death: ACV from $10K–$36K ARR

ACV of $10K to $36K ARR is the valley of death for startups.

Deals of this size are too big for fast sales and too small for high-touch.

You take on complexity without getting the return.

Let’s start with deals under $10K. You can move fast. One or two calls. Clear pitch. Quick decision. You win on volume.

Above $36K, complexity becomes worth it. You get longer cycles. Multiple stakeholders. Larger checks. But the payoff justifies it. You can afford onboarding, CS, post-sale support. The machine scales.

In the middle, everything slows down.

The cycle drags. You get custom demos. ROI docs. Procurement. Legal. It feels like enterprise. But you’re only closing $20K deals.

Now do the math.

Your ACV is $16K. Rep quota is $800K. That’s 50 closed deals a year. At a 10% close rate, that’s 500 opportunities. Around 10 new accounts per week you need to work on to close 1 a week.

Each closed deal takes 12 hours. That’s 600 hours. The 450 that don’t close still take 2 hours each. That’s 900 more.

Total: 1,500 hours a year just on working through the pipeline.

A full-time rep has ~2,000 hours a year. That leaves 25% for everything else. Outbound. CRM. Internal meetings. Sick days. Etc.

One slip, and the model cracks.

So how do you avoid this?

Pick a lane.

If you’re under $10K, optimize for speed. Short pitch. Automated onboarding. Run volume.

If you’re over $36K, lean in. Long cycles. Bigger checks. More structure.

But don’t get stuck in the middle.

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Enjoyed reading this?

Then check out my conversation about this on the focal podcast with Russ Thau, a seasoned sales leader who helped scale Intercom, Box, and Envoy through every stage of growth plus has advised and worked with companies such as Airtable and LaunchDarkly since they were sub $1M in ARR.

Youtube | Apple Podcast | Spotify

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