Reading the numbers
Concentration is the risk the topline hides
A round number on the traction slide can be one customer wearing a trench coat. How to read revenue concentration, and the question that sizes it in one line.
Sofia Reyes, Head of Investing Research · May 21, 2026 · 7 minute read
A topline ARR number is a summary, and summaries hide their own shape. Four hundred thousand dollars across forty-eight customers is a business. The same four hundred thousand where one customer is a fifth of it is a different business with the same headline.
Seed deck, traction slide
Our largest agency, Brookline Insurance Group, is 22% of ARR.
Twenty-two percent from a single logo means that if Brookline leaves at renewal, the company does not go from four hundred to three hundred and eighty. It goes to about three hundred and twenty, and the growth story resets a full quarter. At seed that is survivable. The point is that the risk is invisible in the topline and obvious the moment you ask for the breakdown.
Why concentration hides so well
Decks are built to show momentum, and a big anchor customer helps the momentum story. A founder is not usually hiding concentration on purpose. They put the logo on the slide because it is a good logo. The concentration is a side effect of the same fact, and it only becomes a question if someone does the division.
- 22%
- Share of ARR from the single largest customer
- $91k
- Revenue at risk if that one account churns
- 1 quarter
- How far the growth story resets without it
The read, in order
Concentration is not disqualifying. Plenty of good companies start with one anchor customer that believed early. What you are testing is how fragile the business is to losing it, and how honestly the founder sees that.
- Ask for the revenue by customer, or at least the top three as a share of total.
- Ask the contract length and renewal date of the largest account. A month-to-month anchor is a different risk from a two-year one.
- Ask what the pipeline looks like without that logo, so you can see the underlying growth rate.
- Watch whether the founder already knew the number. The answer to that is often worth more than the number.
You are not looking for zero concentration at seed. You are looking for a founder who can tell you the number before you ask, and has a plan for the quarter they lose it.
The one-line question
If you take one thing to the founder meeting, take this: your largest customer is 22% of revenue, what is the contract length and renewal date, and what does the next two quarters look like without them. It sizes the risk, tests the plan and reads the founder, in a single sentence. A good first-pass memo puts that question at the top for you.