Software Growth

SOC 2

SOC 2 is an independent auditor's report on how a company protects customer data, based on AICPA trust services criteria. B2B buyers often require it.

SOC 2 is not a law and not a certification you pass or fail. It is an attestation report written by an independent CPA firm after examining your controls against criteria set by the AICPA, the American Institute of CPAs. The report says what you do to protect customer data and whether the auditor found those controls designed (and, for Type II, working) properly. Customers read it instead of sending you a 200-question security survey.

The AICPA describes its SOC services as assurance reports with information needed to assess and address the risks of outsourcing services. That outsourcing risk is exactly what your customer faces when they hand you their data.

The five trust services criteria

  • Security (also called the common criteria). Required in every SOC 2.
  • Availability. You meet the uptime and performance commitments you made.
  • Processing integrity. Processing is complete, valid and accurate.
  • Confidentiality. Information designated confidential is protected.
  • Privacy. Personal information is collected, used and disposed of properly.

You choose which to include. Most small SaaS companies start with Security only, then add Availability or Confidentiality if customers insist.

Type I vs Type II

  • Type I looks at whether your controls are designed appropriately on a single date. It is a snapshot, faster to get, and a reasonable first step.
  • Type II looks at whether the controls operated effectively over a period, commonly a few months up to a year. This is the one larger buyers want, because it shows you did the work consistently.

Some buyers accept a Type I and a promise of a Type II. Others will not move without the Type II. Ask a few real prospects before deciding.

What it costs and how long it takes

Published price ranges vary widely, and I would not trust any single number. A startup-focused guide from Startup Defense makes the same point: there is no honest universal price, and cost depends on scope, report type, the criteria chosen, how ready your controls already are and your internal labor. Budget for these separately:

  • The auditor's examination fee.
  • A compliance automation platform (Vanta, Drata and similar) that collects evidence, usually billed yearly.
  • Remediation, such as MFA everywhere, access reviews, logging, background checks and written policies.
  • Your own time. For a team of five, this is often the largest cost.

Get written quotes from two or three audit firms using the same scope. Expect the first report to take several months, and the observation window for Type II adds to that.

Why it matters for sales

SOC 2 rarely helps you win deals. It stops you losing them. EnterpriseReady's access-control guide notes that larger organizations with compliance needs such as SOC 2 or ISO 27001 demand fine-grained access control and audit trails. Procurement will ask for the report, and without it a deal can sit in security review for weeks, lengthening your sales cycle.

When a small SaaS should care

  • You sell to mid-market or enterprise and keep seeing the question in security reviews.
  • You can name deals above a certain size that are blocked on it.
  • You already have the basics: SSO support, role-based access, encrypted data, backups, and an incident process.

If you sell $30 a month plans to freelancers, skip it and publish a clear security page instead. Start earlier than you think only if a single large account depends on it. Buyers may also review your uptime history alongside the report during due diligence.

Related terms

Sources

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