Customer concentration is one of those things that can make an otherwise attractive acquisition look immediately uncomfortable. But we’ve been thinking about whether the headline percentage really tells the whole story. A business where one customer represents a large share of revenue is obviously exposed if that relationship disappears. But what if that customer has been growing with the business, continues to hand over more work, and there’s a long history of the relationship? What if the concentration exists because the business has been capacity constrained rather than because it hasn't been able to win other customers? On the other hand, a diversified customer base isn't automatically safer either. Fifty customers generating 2% each may sound better than one generating 40%, but the underlying quality of those relationships can be completely different. Is it the connection with the current owner of the company or its actually with the service of the company !? For us, the more interesting diligence question is becoming why the concentration exists and how replaceable the revenue actually is, rather than simply looking at the percentage and applying a discount. Curious how others in the search community approach this. At what point does customer concentration become a deal-breaker, and what evidence would make you comfortable underwriting it?