SOC 2 for startups: when to start, what it costs and how to keep it small

For a ten-person SaaS company, SOC 2 is rarely about security maturity. It is about a procurement form from a US customer, or a due-diligence list from an investor. This guide is for founders who need the report, do not want to build a compliance department and would like to know what "small but real" looks like.

When a startup should start SOC 2

Three triggers, in order of urgency:

1. A signed LOI or late-stage deal where the security questionnaire asks for a SOC 2 report. Start now and aim for a Type 1 in 8–10 weeks; most enterprise buyers accept a Type 1 plus a dated Type 2 plan.
2. A funding round where investors run technical due diligence. A readiness report and a dated plan are usually enough at seed; a report is expected from Series A onwards in B2B SaaS.
3. Entering the US market with a product that touches customer data. Here SOC 2 is table stakes; plan it before the first outbound campaign.

Starting before any of these triggers is rarely worth the money. Starting after a prospect has asked twice is expensive in a different way.

Type 1 first, almost always

A Type 1 proves your controls are designed properly at a date. A Type 2 proves they operated for a period. For a startup the sequence "Type 1 now, Type 2 after a 3-month observation period" gets a report into the sales process fastest and gives the team time to get used to running the controls before they are tested over time. Going straight to a 6-month Type 2 makes sense only if no customer needs anything before then.

What it realistically costs

Budget in three lines. First, the CPA firm's fee, which the firm sets itself: for a small company with one product on one cloud, Type 1 engagements start in the low five figures in US dollars and Type 2 costs more. Second, readiness: either your team's time or a partner. Third, tooling: a compliance platform is optional for a Type 1 and very useful for a Type 2. See our detailed cost breakdown. Ask every CPA firm for a fixed fee and get at least two quotes.

Keep the scope small

• One criterion: Security only. Add Availability or Confidentiality in the second cycle if customers ask.
• One product, one environment: leave internal tools and experiments out of scope.
• Carve out your cloud provider: AWS, Azure and GCP have their own SOC 2 reports; you rely on them rather than re-proving them.
• Short first observation period: three months, then twelve.

What to automate and what to do by hand

Automate what is boring and repetitive: user access exports, MFA checks, branch protection monitoring, vulnerability scans, policy acknowledgements. Do by hand what requires judgement: the risk assessment, the vendor review, the incident tabletop, the quarterly access review decision. Platforms such as Vanta, Drata, Secureframe or Sprinto are good at the first list and cannot do the second. And remember: the platform is not the auditor, and since 2026 AICPA expects CPA firms to apply their own judgement rather than accept platform dashboards at face value.

The ten controls that matter most for a small SaaS

1. SSO with MFA on every system that holds customer data.
2. Documented onboarding and offboarding with access removed within 24 hours.
3. Branch protection and peer review on the main branch.
4. Separate production and development accounts; no shared credentials.
5. Encryption at rest and in transit by default.
6. Centralised logs with alerts for authentication failures and admin actions.
7. Monthly vulnerability scanning; annual penetration test.
8. Backups with a tested restore.
9. A one-page incident response plan everyone has read.
10. Quarterly access review signed by a founder.

How BALTUM works with startups

We scope the smallest report that will satisfy your customer, write the handful of policies you actually need, set up evidence collection and run an internal readiness audit. Then we introduce you to independent, licensed US CPA firms that quote fixed fees and work with European companies; you sign with the firm directly. Most startup engagements reach a Type 1 within ten weeks. Tell us about your stack and deadline and we will reply with a plan within one business day.