Weight the pipeline: what $2M in deals is really worth

1. Before you start

A weighted pipeline is the sum of your open deals after each one is multiplied by the chance it actually closes. A raw pipeline just adds the deal values up as if every one were already won. Take two open deals worth $100,000 each: one is a first call (say a 10% chance of closing), the other is out for signature (say an 80% chance). Raw pipeline says $200,000. Weighted pipeline says $100,000 × 0.10 + $100,000 × 0.80 = $10,000 + $80,000 = $90,000. Same deals, less than half the number — because the raw total counts money you have not earned.

Three honest statements before you start:

This is a Decide course. You read a situation, learn the idea, and make a call. You do not write or run any code.
The company below, Harborline, is a composite — an invented B2B SaaS firm built from ordinary figures so the arithmetic is clean. No number is a claim about any real company.
This is not a certification. It shows, to you, that you can defend a pipeline-coverage call.

You need only arithmetic. The hard part is judgment: which deals to believe, and how much.

2. The Situation

Harborline sells onboarding software to mid-market companies. Its quarterly new-business quota is $600,000, and its CRM shows $2,000,000 of open pipeline. The account exec is relaxed: “Two million in pipeline against a six-hundred-K quota — that is more than three times cover, we are fine.”

You are the sales lead, and you have seen this movie end badly. The board wants a number it can count on, and the raw $2,000,000 is not it — most of that money sits in deals that have barely started. Your call: is Harborline actually on track for quota, or short?

3. What you’ll be able to do

After this course you will be able to:

Compute a weighted pipeline — deal value times stage-conversion probability — and use it, not the raw total, to judge whether a quota is covered.
Explain why a raw pipeline over-promises, and name the single mix change that flips a team from “short” to “on track.”
Read a stage mix: tell the difference between a pipeline that is large because of real late-stage deals and one that is large because of early-stage hope.
Set the coverage you actually have against quota, and say what would change the answer.

4. Prerequisites & time box

Prerequisites: arithmetic, and the idea that a sales deal moves through stages (first call → demo → proposal → negotiation). No CRM, no spreadsheet, no sales background required — the stages are defined in section 6.

Time box: about 17 minutes of reading (measured), plus your own thinking time on the call. That is under the 25-minute cap for a concept course.

Difficulty: 3 / 8 — a new-manager decision: a couple of interacting factors and one real judgment call, where the obvious answer is often the trap.

5. The case & where the numbers come from

Harborline is a composite B2B SaaS company: its quota, its open deals, and its stage close-rates are invented from figures a mid-market sales team would recognise, chosen for clean arithmetic and not drawn from or claimed about any real firm. The definitions — sales pipeline, conversion rate, weighted (expected) value, forecast — are standard and cited in section 11. Every figure below is an in-course assumption; every later number is computed from these.

Harborline’s four pipeline stages, and the historical share of deals at each stage that eventually close-won (its stage-conversion probabilities):

Stage	Meaning	Historical close rate
Discovery	First qualified call held	10%
Demo	Product shown to the buying team	25%
Proposal	Written proposal and pricing sent	50%
Negotiation	Terms and signature in progress	80%

The open pipeline right now, by stage:

Stage	Open deal value	Probability
Discovery	$900,000	10%
Demo	$600,000	25%
Proposal	$300,000	50%
Negotiation	$200,000	80%
Raw total	$2,000,000	—

Quarterly quota: $600,000.

6. The Concepts

Raw pipeline versus weighted pipeline

The raw pipeline is just the sum of open deal values: $900,000 + $600,000 + $300,000 + $200,000 = $2,000,000. It treats a first-call Discovery deal exactly like a deal out for signature — every dollar counted as if already won. That is the number the account exec quoted.

The weighted pipeline multiplies each stage’s open value by that stage’s conversion probability, then adds the results. It is the expected close value of what is on the board:

Discovery: $900,000 × 0.10 = $90,000
Demo: $600,000 × 0.25 = $150,000
Proposal: $300,000 × 0.50 = $150,000
Negotiation: $200,000 × 0.80 = $160,000
Weighted pipeline: $90,000 + $150,000 + $150,000 + $160,000 = $550,000

So the same $2,000,000 of raw pipeline is worth $550,000 once you weight it. Against a $600,000 quota, Harborline is short by $50,000 — not comfortably ahead. The raw “three times cover” was counting money the team has not earned.

(An interactive calculator sits here — enter each stage’s open value and its close rate, plus the quota, and it returns the raw pipeline, the weighted pipeline, the coverage, and whether the team is on track or short.)

Stage-conversion probability

A stage-conversion probability is the historical share of deals sitting at a given stage that eventually close-won. It is measured, not wished: you look back over the last several quarters, count how many Discovery-stage deals ever became customers, and that fraction is the Discovery probability. Harborline’s are 10% at Discovery, 25% at Demo, 50% at Proposal, 80% at Negotiation.

Two things follow. First, the probability rises as a deal advances — a deal in Negotiation has survived every earlier filter, so it is far likelier to close than a fresh Discovery deal. Second, because probability rises with stage, a late-stage dollar is worth far more than an early-stage dollar. One dollar in Negotiation carries $0.80 of expected value; one dollar in Discovery carries $0.10 — eight times less. Early-stage deals do not carry real probability yet; late-stage deals do. That is the whole reason weighting changes the answer.

Why an unweighted pipeline over-promises

An unweighted (raw) pipeline over-promises because it lets low-probability, early-stage deals masquerade as committed revenue. At Harborline, $900,000 — nearly half the raw pipeline — sits in Discovery, where only about one deal in ten ever closes. Counting that $900,000 at full value implies the team will win $900,000 of it; the honest expectation is $90,000. The raw total inflates the forecast by exactly the money the team has not yet earned.

This is why a big raw number can sit right next to a missed quota. Raw pipeline answers “how much is in play?”; weighted pipeline answers “how much can I expect to bank?” — and only the second one can be compared to a quota. If you commit the raw number to the board, you are promising revenue the conversion rates say will not arrive.

Where the stage mix flips the call

The stage mix — how the pipeline is spread across stages — is what decides the call, and it can flip it without the raw total changing at all. Suppose Harborline’s reps push work forward so that $400,000 moves out of Discovery and into Negotiation: Discovery falls to $500,000, Negotiation rises to $600,000, and the raw total is still $2,000,000.

Discovery: $500,000 × 0.10 = $50,000
Demo: $600,000 × 0.25 = $150,000
Proposal: $300,000 × 0.50 = $150,000
Negotiation: $600,000 × 0.80 = $480,000
Weighted pipeline: $50,000 + $150,000 + $150,000 + $480,000 = $830,000

Same $2,000,000 raw, but now $830,000 weighted — comfortably over the $600,000 quota. The call flipped from short to on track, and nothing changed except where the deals sit. The number that moves the answer is not the size of the pipeline; it is how much of it is late-stage. That is what you watch, and what you ask your reps to change.

7. Your Call

You have seen how weighting and stage mix decide Harborline’s coverage. Now a different call lands on your desk.

Tessellate sells compliance software to banks — a different B2B SaaS company from Harborline’s onboarding tool, with its own historical close rates: Discovery 15%, Demo 35%, Proposal 55%, Commit 90%. Its quarterly quota is $800,000. This quarter’s open pipeline: Discovery $1,200,000, Demo $800,000, Proposal $400,000, Commit $300,000 — a raw pipeline of $2,700,000. Rather than a simple on-track/short read, your job is different: the CFO wants one forecast number you are willing to commit to the board, and there is a wrinkle — the single $300,000 Commit deal just lost its internal champion, so its real close rate is nearer 30%, not 90%.

How this differs from the taught case (the transfer): this is a different company (a compliance vendor, not Harborline’s onboarding tool) with different numbers, so the arithmetic must be redone from scratch; it is a different decision type — you are committing a forecast figure to the board, not reading on-track/short; and it adds a constraint the taught case did not have — one late-stage deal must be re-weighted because its probability changed. The core concept is the same: weight each deal by its stage-conversion probability, then judge the total.

8. Self-check

Before you write the memo, make sure you can say each of these in one line:

Why is “$2,000,000 in pipeline against a $600,000 quota, we are fine” the wrong read?
What single thing about the pipeline — not its size — decides whether the team is on track?
How does one deal’s change of stage or close rate move the number you would commit to the board?

If any is fuzzy, reread section 6 — raw versus weighted, stage-conversion probability, the over-promise, and the stage mix are the whole course.

9. Stretch

Push the decision further on your own:

Back at Harborline: the $600,000 quota is fixed and the weighted pipeline is $550,000. If you can only touch the Discovery bucket, how much of its $900,000 must you advance into Negotiation (0.10 → 0.80) to close the $50,000 gap? (The genuinely harder one: solve for the moved amount where the added weight equals $50,000.)
Close rates drift over time. If Harborline’s Demo close rate quietly fell from 25% to 15% last quarter and nobody updated the CRM, is the reported weighted pipeline too high or too low, and by how much on the $600,000 of Demo value?
Write the one sentence you would say to an exec who insists “pipeline is pipeline, a deal is a deal.”

10. Ship it — your decision memo

Write a one-page memo to Tessellate’s CFO. State the call (commit $770,000 to the board, below the $800,000 quota, and flag the ~$30,000 gap). Show the two-line arithmetic (weighted pipeline $950,000, less $180,000 for re-weighting the at-risk Commit deal from 90% to 30%). Name what you rejected (committing the $2,700,000 raw pipeline; committing $950,000 without correcting the champion loss; forecasting to the quota) and why. Name the one thing that would change your mind (a new champion re-secures the Commit deal, restoring its 90% weight). Keep it to a single page a CFO grasps in two minutes. This memo is your own argued claim — not a credential.

11. Sources

Harborline and Tessellate, and every dollar figure and close rate attached to them, are composite and illustrative — constructed for clean teaching arithmetic, not drawn from or claimed about any real company. The concept definitions used to reason about them are standard; references below.

Concept / claim	Source (publisher)	URL	Accessed
Sales pipeline as stages of open deals	Wikipedia — Sales pipeline	https://en.wikipedia.org/wiki/Sales_pipeline	2026-07-20
Conversion rate through a funnel of stages	Wikipedia — Conversion funnel	https://en.wikipedia.org/wiki/Conversion_funnel	2026-07-20
Weighting a value by its probability (expected value)	Wikipedia — Expected value	https://en.wikipedia.org/wiki/Expected_value	2026-07-20
Weighted sum = each value times its weight, summed	Wikipedia — Weighted arithmetic mean	https://en.wikipedia.org/wiki/Weighted_arithmetic_mean	2026-07-20
Forecasting future outcomes from current data	Wikipedia — Forecasting	https://en.wikipedia.org/wiki/Forecasting	2026-07-20

Next up

Finished this call? Continue the Sales & Revenue track:

Discount leakage: the deal that looks fine at invoice and bleeds at pocket → · Browse all courses