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January 24, 2023
By: Jack Nichelson

Why SOC 2 Compliance for Startups is Critical

From figuring out market fit for your product or service to pursuing growth, startups often dial in on making more revenue, finding more customers, or both. However, pursuing SOC 2 compliance for startups and small businesses should be a high priority. More often than not, security compliance is often left behind with other concerns pressing for attention and resources from fledgling businesses.  

What many startups and small businesses miss is that SOC 2 compliance and certification can power your growth goals alongside other growth efforts. It signals a commitment to security and trustworthiness to vendors and partners. It helps attract customers and lay the foundation for ongoing internal security efforts. It establishes credibility and provides proof that is often necessary during the vendor evaluation process. 

For many small businesses and startups, the need for SOC 2 compliance is weighed against the complications for completing the process. 

The Long Journey to SOC 2 

SOC 2 compliance and certification can be an extensive undertaking. It’s the result of an audit of your security controls and shows your business has met certain security requirements. The third-party nature of the audit offers evidence your business has instituted a framework to protect client data and continues to prioritize keeping that information protected.  

Start to finish, the SOC 2 process — covering both Type 1 and Type 2 — can take up to 12 to 18 months to complete. A typical compliance program consists of several stages: 

  • Initial baselines (~3 months) — Conduct a gap assessment, install the foundational work. 

  • SOC 2 Type 1 (~6 months) — Get all relevant policies and controls in place, build and formalize your governance program. 

  • SOC 2 Type 2 (~6 months) — This is the review period. This is where a startup proves how well it adheres to the framework it created in Type 1. This is the ‘show your work’ phase. 

  • Audit (~ 3 months) — After your review period, a third-party auditor will check ‘your work.’ Did your business do what it said it was going to do, consistently? Certification is the end point of this final step. 

Despite the daunting nature of that timeline, SOC 2 compliance is critical for many businesses, especially those that are based around providing a service involving the data of customers. For instance, data center companies, cloud service providers, payroll or medical claims processors — essentially most Software as a Service (SaaS) businesses — need to show they can be trusted to handle, store, and process important financial and other sensitive data of their clients.  

For startups looking to grow, it’s essential then to achieve SOC 2 compliance in order to position themselves to new and current customers and vendors. Let’s dive into more reasons why pursuing SOC 2 compliance for startups is a goal you should aim at sooner rather than later.  

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The Benefits of SOC 2 Compliance for Startups 

With the right partner, startups can tackle this important certification that also unlocks associated avenues for growth and stability. 

Show You’re Ready to Grow & Scale 

Put bluntly, SOC 2 compliance for startups shows your business can be trusted to handle customer and vendor data. When companies assess their own risk in working with a third party they need to know if your startup has laid the groundwork necessary to alleviate those concerns. And there is plenty of concern — more than 22 billion records were exposed in 2021 alone

Many enterprise-level customers now require proof of compliance upfront, and the same can be said for many vendors. Cybersecurity is critical in the more digitally-connected supply chain — not just in customer relationships. SOC 2 is now also part of the due diligence conducted by investors when looking to fund new startups or smaller businesses.  

Without SOC 2, your startup may not gain the investment or new business you need to reach the next stage of its development. SOC 2 is viewed as the minimum bar to clear. If you can’t prove your company can reach it, then you’ll risk losing deals that help fuel growth. 

Reduce Your Risk 

Data breaches are costly and capable of derailing any business. As a startup, avoiding the plethora of potential attacks and leaks that have become commonplace is paramount. Every CEO and board knows the kind of havoc that comes from a data breach, including expensive fees, legal liability, a loss of trust from customers, and damage to your company’s reputation. 

SOC 2 provides a path to mitigation and prepares your business to protect sensitive data. This helps insure the health of your business by reducing the risk of a damaging breach from even occurring. SOC 2 gives you a standard and proven set of protocols and policies to follow. You’ll start on firm footing, with clear objectives, and with more resilience in an environment ripe with potential threats.  

Get a Roadmap and a Building Block 

When a startup decides to pursue SOC 2 compliance it helps put security at the forefront of the business’s overall strategy. With an established set of standards provided by SOC, your company will have a blueprint of what to prioritize, how to achieve it, and the next steps to target.  

This foundation is easier to implement at the start. Larger, more established businesses are more unwieldy and cumbersome, or have legacy elements that have to be taken into consideration. Startups working toward SOC 2 can make sound security principles and decisions part of their DNA from the very beginning.  

This roadmap is critical for developing a security-first culture. When security is a priority, your business will avoid the time and money lost on mistakes and errors, and have secure processes for landing bigger customers and handling more data.  

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Inversion6 Simplifies SOC 2 Compliance for Startups 

At Inversion6, we have the expertise and experience to seamlessly guide you through every step of the process. We’re a SOC 2 practitioner, and SOC 2 certified as well, and capable of handling every aspect — from how to scope for SOC to selecting an auditor, preparing for the audit, and navigating the review period.  

We can engage with clients at any stage of the process, whether you’re just beginning your SOC 2 compliance journey or stuck on finishing up your Type 2 requirements — or any spot in between. Our team of CISOs all come with expertise honed from both sides of engagement, as both cybersecurity consultants and practical experience implementing solutions for internal teams from across various industries. Best of all, Inversion6 has achieved a 100% SOC 2 compliance rate for clients.  

SOC 2 compliance for startups delivers a real, tangible value, but too often businesses shy away from the undertaking due to the time needed, cost incurred, and the potential for the project to fall into limbo. We remove the complications from pursuing SOC 2. We’re the ‘easy button’ to ensure you get across the finish line.  

Connect with Inversion6 today to learn more about SOC 2 compliance for startups and how we remove uncertainty from the process. 

Post Written By: Jack Nichelson
Jack Nichelson is a Chief Information Security Officer for Inversion6 and a technology executive with 25 years of experience in the government, financial and manufacturing sectors. His roles have included leading transformation and management of information security and IT infrastructure, data management and more for organizations in numerous industries. Jack earned recognition as one of the “People Who Made a Difference in Security” by the SANS Institute and received the CSO50 award for connecting security initiatives to business value. Jack holds an Executive MBA from Baldwin-Wallace University, where he is an adviser for its Collegiate Cyber Defense Competition (CCDC) team. He is certified in the following: CISSP, GCIH, GSLC, CRISC, CCNP, CCDA, CCNA and VCP.

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