For startups eager to grow, break into new markets, or simply enhance data security, becoming SOC 2 compliant can be one of the best business decisions you can make. SOC 2 (Service Organization Controls 2) is a trusted set of compliance requirements designed for technology-based companies that use cloud-based storage of customer data. However, SOC 2 is not just another compliance obligation – it’s a voluntary standard that provides an extremely effective way to meet the highest levels of information security while unlocking a powerful competitive edge.
That said, becoming SOC 2 compliant can be highly complex. Getting it right requires careful planning and the strategic use of compliance automation software. We’ve developed this guide to help startups make more informed SOC 2 decisions and drive sustainable business growth.
Why is SOC 2 so valuable for tech startups? Here’s the short answer: SOC 2 is one of the best ways to stand out from the crowd and demonstrate that you meet the highest standards of information security. Clients know they can trust your InfoSec processes. And a SOC 2 attestation report ensures you meet even the most exacting procurement policies.
And for the most ambitious entrepreneurs, that answer is all you need to know. Tech startups don’t yet have a proven track record. They need independent verification that their data security controls are up to the task. They have to be able to effectively demonstrate their processes are reliable and secure. Without SOC 2, SaaS startups have very little chance of driving business at scale and breaking into new markets.
Without a SOC 2 report, many prospects simply won’t become customers.
Today, organizations are increasingly expected to provide proof of compliance, like a SOC 2 attestation report, during vendor assessments and throughout the request for proposal (RFP) process. It’s become a key requirement in earning trust and closing deals at scale.
Of course, it is precisely because SOC 2 is so rigorous that it can be so daunting to implement. Without the right technology and support, SOC 2 compliance can quickly become complex and time-consuming.
The purpose of this guide is to explain why SOC 2 matters and precisely how it helps startups succeed in competitive markets. No less importantly, we’ll outline how to make SOC 2 compliance simpler, easier, and more effective – sharing key strategies that enable any business, especially SaaS startups, to achieve SOC 2 success.
Becoming SOC 2 compliant is an effective and comprehensive solution that gives startups a real competitive advantage.
With over 60% of startups worldwide building products for other businesses, and around 61.5% focusing on B2B solutions (Statista, 2024) proving you have high-level security systems in place from the start is essential.
But there’s a deeper reason why implementing SOC 2 early in a company’s life cycle is so invaluable. SOC 2 Type II isn’t just a snapshot of your current security systems. It’s an extensive process that involves developing robust controls for data security, availability, and confidentiality – and proving they operate effectively over time.
For startups, this rigorous process means building an extremely strong data security foundation that will enable the business to overcome even the toughest security challenges as it grows.
In the highly competitive U.S. startup ecosystem – with roughly 430,000 new small business applications every month – SOC 2 compliance is the most trusted security standard. Achieving SOC 2 compliance not only strengthens data protection but also builds trust with clients and investors, helping startups stand out in crowded markets. For startups hungry to win enterprise clients, SOC 2 isn’t just a nice-to-have, it’s often the difference between success and failure.
As an independent standard, SOC 2 provides an objective, detailed report on the controls your company has successfully implemented to protect your clients’ data.
Because compliance is verified by an independent auditor, clients don’t have to simply take your word for it – they get solid proof. But it’s more than just a matter of trust. The SOC 2 audit report gives a thorough overview of the controls you’ve designed and whether they’re working effectively. This means potential clients can get a comprehensive overview of the Trust Service Principles you’ve chosen. For prospects with strict security requirements, a detailed SOC 2 report can make all the difference.
Achieving SOC 2 compliance unlocks valuable business opportunities, including:
Together, these benefits make SOC 2 a key advantage for startups competing in today’s highly security-conscious marketplace.
We’ve discussed the value of an independent compliance security standard from a client perspective. But SOC 2 also provides a powerful guiding light for your own business. SOC 2’s robust, exhaustively researched and fine-tuned protocols take the guesswork out of developing your own security controls. By setting the gold standard to which you can aspire, SOC 2 ensures there are no oversights in your security protocols and that your controls really are effective. In other words, SOC 2 takes the guesswork out of security. Plus, your audit partner or SOC 2 consultant will help you develop relevant, effective controls and verify that you have implemented them successfully.
SOC 2 provides an excellent framework for data security while independent auditing can identify any lapses or shortcomings in your compliance. The result: your company develops truly robust, comprehensive data security systems and best security practices throughout the organization.
And that’s not just good marketing. For SaaS companies and for startups that are still building their reputations for excellence, even a single data breach could destroy your reputation. And if you lose sensitive information, such as medical or personal financial data, you could even be liable for penalties.
Implementing SOC 2 is therefore about more than simply demonstrating that you meet the highest standards of information and organizational security. It’s an effective way to ensure you develop resilient controls, without any gaps, that will serve your business over the long term.
SOC 2 is flexible, and compliance can be optimized to suit the needs of a wide range of startups. That’s a great feature: SOC 2 is adaptable, unlike some more rigid standards. However, that flexibility also means that you need to make some careful decisions. Implementing SOC 2 is not a one-size-fits-all process.
One of the first steps in starting the SOC 2 compliance process is choosing which of the five Trust Service Principles (TSPs) you are going to include in your report. The five principles were carefully devised by the American Institute of Certified Public Accountants (AICPA) and cover the full range of data security and reliability issues faced by SaaS companies. The Trust Services Principles are Security, Availability, Processing Integrity, Confidentiality, and Privacy.
Here’s a quick overview of what you need to know:
| Security | This principle covers InfoSec and how to safeguard data through security controls. |
|---|---|
| Availability | The availability principle tests how reliable your platform is, including client service and uptime. |
| Processing Integrity | This establishes the accuracy of a platform’s processing systems and the margin of errors. |
| Confidentiality | The confidentiality principle tests how effective the access controls are and whether the data is restricted to authorized individuals only. |
| Privacy | This principle guides the process in which organizations obtain, store and transfer sensitive data. |
Of the five Trust Service Principles (TSPs), businesses can select the ones most relevant to their operations before the audit, allowing them to tailor their SOC 2 report and focus on specific business needs. However, one principle – the Security Principle – is mandatory for all SOC 2 compliance. While security is required in every SOC 2 implementation, businesses do not need to implement all five principles. Instead, they should include only those principles that align with their unique operations and risk profile.
SOC 2 controls are the processes, procedures, and systems that your organization has in place to protect customer data, according to SOC 2 criteria. They are based on the five Trust Service Principles (TSPs) included in your audit scope.
Each TSP has specific criteria, and controls are the measures implemented to meet these criteria. Auditors evaluate both the design and effectiveness of these controls. While there are many controls linked to each of the five TSPs, those associated with the mandatory Security principle include common IT general controls:
These SOC 2 controls relate to a commitment to integrity and ethical values.
This includes SOC 2 controls related to the internal and external use of quality information to support the functioning of internal control.
This requests the identification and assessment of risk relating to objectives.
Controls related to the performance of ongoing and separate evaluations to determine deficiencies of controls and communicate those to the correct parties.
These relate to the control activities contributing to risk mitigation and policy and procedure establishment.
Related to the implementation of logical access security software, infrastructure, and architectures over protected information assets to protect them from security events to meet its objectives.
SOC 2 controls related to the use of detection and monitoring procedures to identify (1) changes to configurations that result in the introduction of new vulnerabilities and (2) susceptibilities to newly-discovered vulnerabilities.
Controls related to the authorization, design, development, testing, approval, and implementation of changes to infrastructure, data, software, and procedures to meet its objectives.
Identifies, selects, and develops risk mitigation activities for risks arising from potential business disruptions.
Identifying the scope of your implementation is just the first step in your SOC 2 journey. Once you have decided which Trust Service Principles you wish to benchmark your systems against, it’s time to identify any gaps between your objective and your current systems.
To do this, you start by conducting a Readiness Assessment. This is the process of identifying any shortcomings and then taking the appropriate measures to address them. The Readiness Assessment comprises two parts:
The Gap Analysis is a careful evaluation of your current controls and systems. You identify any loopholes between the state of your current controls and how they should be operating, within your chosen scope of the SOC 2 framework.
Again, we can see the value of a gold standard benchmark like SOC 2. You can evaluate your current systems against the controls prescribed by a proven independent standard, and evaluate where you fall short. This is a critical part of developing comprehensive controls, without any gaps.
Once you’ve identified any gaps in your controls, you need to set to work addressing those shortcomings. To do so, you need to design any missing controls that address shortcomings and complete all action items necessary to remediate any other gaps identified. A good SOC 2 partner will work closely with you to ensure all security gaps and issues are addressed successfully.
Startups understand the value of partnering with domain specialists. After all, building a new company from scratch is a learning process, and entrepreneurs are usually keen to learn from experts.
A professional SOC 2 advisory service can be invaluable when you choose to implement SOC 2. An advisory service will help you most effectively determine the scope of audit, advise you on best practices, and guide you towards a successful audit. A good advisory service will provide the knowledge and expertise you need and make sure you use your resources most effectively, so you don’t waste time on unsuccessful implementations or devote resources to ineffective or unnecessary interventions.
According to the IBM X-Force Threat Intelligence Index 2024, 83% of organizations faced insider attacks, often due to weak security and poor employee training. Since lack of knowledge is a leading cause of SOC 2 misconfigurations and non-compliance, partnering with a trusted compliance expert is crucial to fully benefit from the SOC 2 readiness process and get guided every step of the way.
When choosing an auditor to conduct your SOC 2 report, there are certain non-negotiables. Only an independent AICPA-affiliated auditor is permitted to conduct a SOC 2 audit. Keep in mind that you are under no obligation to undergo a SOC 2 audit, and your goal is to get the most out of the process. Therefore, it makes sense to select an auditor who will provide a detailed, comprehensive report highlighting your SOC 2 achievements. After all, the last thing you want is a generic audit report.
For that reason, it’s important to select an auditor with:
The auditor’s reputation also plays a major role. If you plan to sell to corporations, you may want them to recognize and trust the CPA firm performing the audit. The Big 4 accounting firms are globally renowned, known for their high standards, which builds client trust. However, engaging a Big 4 firm may come with steep fees, so startups with limited budgets might choose smaller CPA firms. It’s important to consider your customers’ requirements and expectations when making this choice.
Becoming SOC 2 compliant involves several key steps, from preparation through to ongoing maintenance. Here’s an overview of the typical process for tech startups:
For startups, first-timers, or companies without in-house security and compliance experts, hands-on guidance during audit preparation is essential. A trusted SOC 2 partner helps you understand specific SOC 2 requirements, identify compliance gaps, and efficiently navigate the process.
Organizations select which of the five Trust Service Principles (TSPs) to include in their audit. The controls monitored will depend on this selection. Since every business is unique, a customized list of controls should address specific risks relevant to your operations. Organizations also need to decide on the reporting period in the case of a SOC 2 Type II report.
Only licensed, independent CPA firms specializing in IT audits can conduct SOC 2 audits, following AICPA guidelines. Choose an auditor with extensive SOC 2 experience, knowledge of your industry, and familiarity with similar-sized companies. Audit costs and timelines depend on your auditor choice.
This phase determines if your organization is ready for the official audit. A gap analysis identifies whether your security posture meets SOC 2 criteria and highlights necessary remediation steps.
After completing the observation period (for Type II), the auditor evaluates whether your controls operate as management states and comply with SOC 2 criteria. The auditor then issues a SOC 2 Type I or Type II report with details of the testing results.
A SOC 2 report is an examination. The attestation report provides the auditor’s opinion, attesting whether your internal controls are in place and meet the criteria of the Trust Service Principles. There is no “pass” or “fail” — rather a detailed evaluation from the auditor.
To keep your SOC 2 report valid, you must renew it annually. This means scheduling audits every 12 months and continuously monitoring controls, updating policies and procedures. Pro Tip: Have a SOC 2 compliance checklist in place to stay on track.
Implementing SOC 2 requires a considerable investment of time, effort, and money – especially for startups, where it often involves much of the team. But affordability isn’t just about dollars; it also includes the opportunity cost of diverting key employees from their core duties to focus on compliance. Fortunately, compliance automation can help manage this effectively, which we’ll discuss in more detail in the next section.
SOC 2 audit costs vary widely based on factors like organization size, audit scope, and the type of SOC 2 report (Type I vs. Type II). The choice of Trust Service Principles and the complexity of your operations also impact pricing. Additionally, costs include fees for auditors (which can range from smaller firms to the Big 4), consultants, and software tools.
Preparation before the audit – such as readiness assessments, gap analysis, remediation, security training, policy documentation, and risk assessments – adds to the cost but is, of course, vital for SOC 2 success. It’s also important to note that many startups hire third-party SOC 2 consultants, which can represent a significant portion of the expenses. Here’s a breakdown of typical costs involved in preparing for and completing a SOC 2 audit:
| Cost Component | Estimated Range | Notes |
|---|---|---|
| Security Awareness Training (SAT) | ~$2,500 | For all employees |
| Policy Documentation | ~$8,000 | Assistance with developing policies |
| Risk Assessment | ~$2,000 | Identifying and managing risks |
| SOC 2 Consultant | ~$15,000 | Optional but very common for startups |
| SOC 2 Audit Fee | $12,000 – $60,000+ | Depends on size, scope, auditor reputation |
| Total (typical) | $39,500 – $87,500+ | Approximate combined range |
You need to consider the opportunity cost of not implementing SOC 2. In other words, your initial investment should be weighed against the benefits of winning clients and entering new markets.
Most obviously, customers expect you to take their data seriously. Without SOC 2, you risk losing business, as compliance is often part and parcel of the procurement process – especially for established and global companies.
Even more critically, without a strong information security standard in place, your organization faces the risk of data breaches or major service disruptions. Data breaches remain a top nightmare for companies worldwide – not just for their catastrophic costs but for lasting reputational damage and lost customer trust.
The average global cost of a data breach is a staggering $4.88 million, covering detection, business losses, response, and notification.
As non-compliance costs continue to rise, protecting data and privacy has rightly become a top priority for company leaders, making proactive measures absolutely essential.
The type of SOC 2 audit you undergo will also determine the cost of compliance. SOC 2 Type I is considerably less expensive, but SOC 2 Type II is universally recognized as a much higher standard of data security and rigor.
What if we said startups could save $25,000 and over 300 hours on security compliance? Implementing SOC 2 effectively means maximizing value without cutting corners. This is where automation software makes all the difference.
Automation reduces the total costs and time needed to prepare for an audit. It saves companies thousands of dollars and hundreds of hours by automating manual processes and providing dedicated advisory support. Features like a built-in policy center, security awareness training, and readiness assessments mean you’re not paying costly third-party consultants.
More importantly, automation frees your key employees from time-consuming compliance burdens, allowing them to focus on more productive work and reducing the opportunity cost of compliance.
The table below shows how many hours SMBs typically spend on SOC 2 compliance each year when done manually versus using automation, highlighting the substantial time savings automation provides.
| Manual compliance | With automation | |
|---|---|---|
| Employees hours | 200-250 hours | 20-50 hours |
| Policies and procedures | 50-100 hours | 5-10 hours |
| Audit management | 25-45 hours | 8-16 hours |
| System description | 20-40 hours | 4-8 hours |
| Evidence collection | 50-150 hours | 10-20 hours |
| Readiness period | 3-12 months | 2-12 weeks |
Compliance automation makes compliance smarter, faster and greatly reduces human error. It also saves money. An integrated compliance system with built-in security modules like risk assessment, security awareness training, automated evidence collection, and audit management gives you a single trusted source to manage all your SOC 2 workloads. Plus, it reduces the need to invest in additional technologies.
But beyond efficiency, automation helps avoid the huge opportunity cost of employees spending countless hours on manual compliance tasks. For startups, especially in early growth phases, diverting resources away from product development, hiring, and sales to manage compliance can stall progress. Often, this just isn’t a justified use of resources.
Many startups implement SOC 2 early to build a rock-solid security foundation from the get-go, but without automation, many struggle simply because they lack the capacity. Additionally, the MetricStream 2025 Survey Report reinforces that with guidelines and policies evolving almost weekly, navigating complex compliance requirements is a top challenge. To overcome this, startups must adopt agile strategies and leverage the power of automation.
Considering the practical daily realities startups face, we can appreciate that, in many cases, compliance automation is a game-changer. It doesn’t just save time – it keeps your team laser-focused on growth and innovation with minimal disruption, so you can achieve compliance faster and with less hassle.
Startups face a unique challenge. You’re building the practices and systems that shape your company’s growth while lacking the resources and in-house security teams of established firms. So, how do you navigate the unknown complexities of SOC 2 compliance while keeping your compliance process streamlined?
In these cases, the invaluable input of an advisory team, supported by specialized compliance automation technology, creates a powerful combination that’s greater than the sum of its parts.
A good advisory team ensures you get the most value out of the SOC 2 process by guiding you, training you fully on your compliance platform, and tailoring the journey to support your business goals. Meanwhile, automation software helps you execute their advice efficiently and accurately. In other words, automation lets you maximize your SOC 2 partner’s impact, and a good advisory team guides you from start to finish to ensure your SOC 2 automation delivers the best results.
Together, they boost your compliance efforts by:
Speeding up and streamlining the process
Eliminating manual admin work
Making it easier to customize controls and policies
Reducing human error
Saving significant time and money
Allowing your team to focus on their core roles
Enabling product development, innovation and growth
This guided automation is the smartest way for startups to achieve SOC 2 compliance without slowing down growth.
First time implementing SOC 2? The good news is that you can learn from others’ experiences. While nothing replaces an expert guide who ensures you follow best practices and tailors your SOC 2 program to your startup’s specific needs, many startups fall into common traps – especially when trying to cut corners.
As experts, we’ve identified the top 5 most common SOC 2 implementation mistakes all startups should avoid:
1. A lack of SOC 2 leadership
SOC 2 is a complex process that requires coordination across the entire startup. Strong, formalized leadership is critical – ideally with a designated project manager to oversee compliance activities and liaise with all partners and stakeholders. Additionally, senior leadership should be involved, authorizing necessary interventions and ensuring clear lines of communication are established between teams.
2. Underestimating the SOC 2 readiness assessment
Failing to properly assess whether your startup is ready for audit is the quickest way to risk a negative report. The readiness assessment isn’t simply a useful diagnostic – it’s a vital part of the SOC 2 implementation process. By conducting a thorough gap analysis, you can identify vulnerabilities early and allocate the right resources to fix issues more efficiently.
3. Thinking SOC 2 is a one-off achievement
SOC 2 audits must be renewed annually since the audit period covers an initial period of 3-5 months (first report) followed by up to 12 months after the first report issuance. You can’t simply implement SOC 2 once and then rest on your laurels. Staying competitive means keeping your SOC 2 audit up to date.
More importantly, SOC 2 compliance is about maintaining impeccable security standards continuously – not a one-off box-ticking exercise. The right automation tool provides ongoing audit support and 24/7 control monitoring, ensuring you stay compliant all year round and alerting you instantly to any non-compliance issues.
4. Trying to tackle SOC 2 compliance on your own
Implementing SOC 2 for the first time is a complex undertaking, full of unknowns. As startups often lack a dedicated compliance team, they face plenty of guesswork with relatively limited resources. That’s why choosing the right SOC 2 partner matters. The best partners don’t just advise on best practices – they tailor the compliance journey to fit your business operations and goals, making the process smooth and efficient.
5. Managing compliance processes manually
Startups thrive on being lean and moving fast, but manual SOC 2 compliance is often slow, inefficient, and extremely resource-intensive. For that reason, startups in particular should prioritize automation to make compliance faster, more efficient, and more reliable – building greater trust with customers. Moreover, human error remains a leading cause of data breaches, with 68% of incidents involving non-malicious mistakes like phishing or misconfigurations – risks that automation can help prevent.
To recap, the table below highlights the most common SOC 2 compliance pitfalls startups face, along with practical tips to avoid them and streamline your compliance journey:
| Common SOC 2 Pitfall | What to Avoid / Solution |
|---|---|
| Lack of SOC 2 leadership | Assign a dedicated project manager and involve senior leaders for clear communication and coordination. |
| Underestimating your SOC 2 readiness assessment | Conduct a thorough gap analysis early to identify and address vulnerabilities efficiently. |
| Thinking SOC 2 is one-off | Renew audits annually; maintain continuous compliance with automation and 24/7 monitoring. |
| Trying to achieve SOC 2 compliance alone | Partner with dedicated SOC 2 experts who tailor the process to your startup’s needs. |
| Managing compliance manually | Prioritize automation to speed up compliance, reduce errors, and build customer trust. |
As we’ve established, startups have a unique set of SOC 2 requirements. They need flexible, cost-effective, and efficient solutions to stand out in highly competitive markets. But it’s crucial to look beyond short-term goals – startups require fully scalable solutions that build a strong foundation for growth and adapt as their business evolves.
Scytale offers powerful compliance automation software tailored for SaaS companies hungry to scale. What sets Scytale apart is the blend of expert advisory, hands-on support, and comprehensive training designed to help customers maximize SOC 2 automation – both now and as they grow. Scytale is committed not just to growth, but to sustainable, effective growth, ensuring security controls are robust, resilient, and aligned with your startup’s strategic goals.
From fast-growing startups new to compliance (“SOC 2, huh?”) to established multinationals seeking more efficient GRC management, we understand your greatest hurdles. We know compliance is far from a walk in the park – that’s why a streamlined, automated approach is the answer.
While Scytale provides unmatched technology and support for businesses of all sizes, we also recognize that every business is dynamic and requires tailored, flexible, and innovative security compliance solutions. That’s the Scytale difference.
For startups with limited resources and tight timelines, getting SOC 2 right the first time is crucial. With smart automation, expert advice, and careful planning, any business can achieve SOC 2 compliance efficiently and affordably.
Here’s a handy checklist of essential SOC 2 compliance dos and don’ts to consider when implementing SOC 2 in your business:
Do:
Don’t:
It would be an overstatement to say that implementing SOC 2 is easy. But with the right technology and expert guidance, it’s far more achievable than many startups realize. This eBook has shown how startups can build strong security protocols and position themselves for long-term success by leveraging SOC 2 automation and trusted partners.
Here’s what we’ve learned:
Startups need SOC 2 automation and expert support so key employees can stay focused on their day-to-day responsibilities.
SOC 2 first-timers require a partner to help establish core information security best practices and maintain oversight company-wide, making compliance manageable and sustainable.
Compliance is becoming increasingly critical for startups aiming to grow and gain a competitive edge.
As compliance demands grow, automation enables you to embed robust security controls from day one – without losing focus on your core product. For SaaS startups, mastering this balance is the ultimate recipe for growth, trust, and lasting success.
