SOC 2 Compliance

SOC 2 (Service Organization Control 2) compliance is a security and operational controls certification administered by the AICPA. It evaluates a company's controls across five Trust Service Criteria: security, availability, processing integrity, confidentiality, and privacy. SOC 2 Type II reports (the standard enterprise-grade certification) require documented policies and procedures, implemented controls, an external audit by a CPA firm, and ongoing maintenance. SOC 2 is widely required as a prerequisite for selling to enterprise customers in regulated industries (healthcare, financial services) and increasingly across all enterprise software. It's the certification that gates many enterprise sales conversations.

The two SOC 2 report types:

SOC 2 Type I:

• Point-in-time assessment of controls.
• Lighter requirement; auditor confirms controls exist and are designed appropriately.
• Often the starting point.

SOC 2 Type II:

• Tests controls over a period (typically 6-12 months).
• Demonstrates controls are actually working over time.
• Standard for enterprise sales.

The Trust Service Criteria:

Security (mandatory): protection against unauthorized access.

Availability (optional): system available for operation as committed.

Processing integrity (optional): system processing is complete, valid, accurate.

Confidentiality (optional): confidential information is protected.

Privacy (optional): personal information is handled per privacy commitments.

Most companies start with Security; add others based on customer requirements.

The path to SOC 2 Type II:

Phase 1: Gap assessment (1-2 months): identify what controls are missing or undocumented.

Phase 2: Implementation (3-6 months): document policies, implement controls, train team.

Phase 3: Observation period (6-12 months): controls operate; evidence is collected.

Phase 4: Audit (1-2 months): CPA firm conducts audit; produces report.

Total: 12-18 months typically from start to first SOC 2 Type II report.

Cost: $50K-$150K+ for first audit (gap assessment + audit fees); $30K-$80K annually thereafter.

Common SOC 2 tools and providers:

Compliance platforms: Vanta, Drata, Secureframe, Sprinto. Automate evidence collection and control monitoring.

Auditing firms: Schellman, BPM, Insight Assurance, Moss Adams, regional CPA firms.

When to start SOC 2:

At Series A or B: typical timing as company begins enterprise sales motion.

When customers ask for it: enterprise customers requiring SOC 2 is a strong trigger.

Pre-enterprise sales push: 12-18 months before enterprise sales focus needed.

What founders get wrong: Starting SOC 2 too late, then losing enterprise deals while certification is in progress. The right discipline: start 12-18 months before enterprise sales push; use compliance platform; commit to ongoing maintenance.

Related: GDPR Compliance · Privacy Policy · Data Processing Agreement · Audit · Go-to-Market Strategy

FAQ

What is SOC 2 compliance?
A security and operational controls certification administered by the AICPA, evaluating controls across five Trust Service Criteria (security, availability, processing integrity, confidentiality, privacy). SOC 2 Type II reports are the standard enterprise-grade certification.

Why do startups need SOC 2?
Because enterprise customers (especially in regulated industries: healthcare, financial services) increasingly require SOC 2 as prerequisite for purchase. Without SOC 2, enterprise deals stall. Increasingly required across all enterprise software, not just regulated industries.

How long does SOC 2 Type II take?
12-18 months typically from start to first report. Gap assessment (1-2 months), implementation (3-6 months), observation period (6-12 months), audit (1-2 months). Start 12-18 months before enterprise sales is critical.