When Should a Startup Get SOC 2? Timing Guide
When to start, when to wait, Type 1 vs Type 2, and the real cost of starting too late
Security and compliance generally becomes an issue when a prospect requests something you don’t have. Often, that’s a SOC 2 report. And if you don’t have SOC 2 in place when a prospect asks about it, there’s now a deal on the line and a months-long process standing between you and the signature.
For most startups, getting moving on SOC 2 early is often the right move. Finding out you needed it only once a deal depends on it, is generally more expensive.
Here's what you need to know about when SOC 2 timing, when it makes sense for startups, and when it may be okay to focus elsewhere.
The honest answer to 'is it too early?' is that starting SOC 2 before you need it carries little downside, whereas starting too late may cost you a deal or slow your pipeline. That asymmetry often makes SOC 2 worth pursuing early if you know it’ll be required at some point.
Speaking about his company's SOC 2 journey, Aikitech founder Jack Rondoni said: “I’d begin months earlier, so SOC 2 could land before key customer opportunities. Timing the certification matters more than you realize.”
SMART Doc App's CISO Caleb Severn echos that statement: “If I could do it over, I would get SOC 2 certification while in stealth mode, before our first demo to a potential partner.”
One timing constraint that needs to be considered is that a SOC 2 Type 2 report covers an observation window and the shortest period auditors will accept is around 90 days. So if an enterprise buyer that’s ready to sign a contract asks for your SOC 2 and you don’t have it, you're looking at three to six months before you can hand one over.
Of course, starting early will require some time and budget — both of which are in demand at a young, fast-growing startup. But the investment usually pays dividends because without SOC 2 in place, deals may get stuck and you've capped revenue you already earned from clients that want to buy.
My advice to every founder is to start earlier than feels necessary. Most of the founders we work with say afterward that they wish they had.
Your headcount and revenue don't really have any bearing on the decision to pursue SOC 2 or not. What matters more is what you're selling and who you're selling it to. A five-person startup selling to enterprise organizations will need SOC 2, a 50-person team building a simple app for consumers may not.
That last one comes up a lot. Do you need SOC 2 if you only sell to small businesses? Usually not, until a small-business buyer with a security team asks for it, or you decide to move upmarket. Small companies rarely send security questionnaires.
Most startups start SOC 2 around the time they get their first bite of interest from an enterprise customer. Before that interest exists, waiting is a defensible call.
But waiting is not the same as ignoring. Know roughly what your timeline looks like for SOC 2 (three to six months for a Type 2), so you can map it to your roadmap. If enterprise clients are 12-months away, you may be able to wait, if that target is nine months, it's probably time to start moving
Startups will generally need to get started on SOC 2 once one of four signals appears (and again, none of them is about company size):
- Direct demand. A prospect sends a security questionnaire or asks for your SOC 2 report. Your deals are now going to start depending on SOC 2 (honestly, you're probably a bit late at this point).
- Moving upmarket. If you're starting to target mid-market or enterprise deals as part of your growth strategy — most enterprise procurement teams will expect to see a SOC 2 report before signing a deal.
- Sensitive data. If you handle health records or payment details, buyers will want proof of your security controls regardless of how big the deal is.
- Fundraising. If you're raising a Series A or B, some investors read SOC 2 as a sign of operational maturity, and the deals that round is meant to unlock will expect it too.
Can a Pre-Revenue Startup Get SOC 2?
Pre-revenue startups can get SOC 2. But "can" and "should" are different questions. Often, a pre-revenue startup will only need SOC 2 in two scenarios:
- A signed deal depends on it. An enterprise prospect is ready to buy, and their procurement process won't move without your report.
- You're enterprise-first and well-funded. If you're go-to-market strategy is focused on enterprise or regulated buyers from day one, and you have the funding to build the program before revenue arrives.
If you're pre-revenue and still searching for product-market fit, with no enterprise buyers lined up, SOC 2 isn't required pre-revenue. And building the program now would pull time away from the work that decides whether the company survives.
Should You Get SOC 2 Type 1 or Type 2 First?
Here's the way I tend to look at Type 1 vs. Type 2:
- Type 1 is a bridge
- Type 2 is the destination
A SOC 2 Type 1 report assesses your controls at a single point in time. If you need to move fast, Type 1 can be completed in a couple of weeks (or less — he fastest we've gotten a company there was eight or nine days).
On the other hand, a SOC 2 Type 2 report observes your controls over a period of time (at least 90-days) and monitors how your controls work over that period. SO realistically, for a business getting its first SOC 2 Type 2 report you're looking at a 4-6 month timeline.
If a deal is on the line and you need to move fast, Type 1 can make sense. But its often seen as a bridge to Type 2. If there's no immediate deadline, you'll be better off going straight to Type 2.
If you're responding to a request for proposal (RFP) that requires Type 2 when you only have Type 1, you may still be able to bid (but check beforehand). You can lead with your Type 1 report and share your dated commitment to achieving Type 2.
Want to dig deeper into Type 1 vs Type 2? Our full Type 1 versus Type 2 comparison covers the timelines, cost, and other differences in detail.
How Do You Get SOC 2 on a Tight Budget?
Many startups don't budget for security as they first get going, so SOC 2 can be an unwanted expense. But it doesn't have to break the bank.
Scope is the biggest lever you have at your disposal when it comes to managing cost. SOC 2 has five Trust Services Criteria, but only Security is required — every report includes it, and it's the one buyers expect. You can start with Security then add Availability, Confidentiality, or the others later, when a specific deal calls for them. (Though that may depend on your industry as some more regulated industries may want to see other Trust Services Criteria in any report.)
Software is another cost you'll need to consider. A compliance automation platform like Vanta can handle most of the evidence collection for you, which cuts the manual work sharply.
Where I often see startups go wrong is there internal time and bandwidth. Founders budget for the audit fee and the software. But generally underestimate the value of their own time. Writing policies and chasing evidence pulls founders and engineers off product, and at the earliest stage that time is the most expensive resource you have.
If you'd rather keep that time on product, Workstreet's AI-Powered GRC can get you ready for SOC 2 and take the pressure off your internal team.
Get Your Timing Right
SOC 2 timing is about understanding your business stage and who you're selling to. If you're about to start selling into the enterprise, handle sensitive data, or are pre-launch and targeting enterprise ICPs, the time to start is now. You're on the clock.
If none of that is true yet, you may have some time to play with. But the moment you start to move upmarket, things change.
Whenever you decide to move forward with SOC 2, the goal is to move fast without pulling the team off their day-to-day roles. That's where Workstreet comes in, our expert SOC 2 implementation services get you audit-ready quickly. From Type I to Type II, we'll guide you through every step of the process with proven methodologies. Talk to our team here.
