When to Pursue SOC 2 Compliance (And When to Wait)

Three months ago, a SaaS startup lost their dream $500K enterprise deal on the final call. The procurement team asked one question: “Are you SOC 2 compliant?” Answer: “We’re planning to start that soon.” Deal gone.

Last week, a different startup spent $45K and six months on SOC 2… but they have zero enterprise customers. They burned runway chasing a certificate nobody asked for yet.

SOC 2 can be the key to enterprise sales or an expensive distraction. Here’s how to know which one applies to you.

What SOC 2 Actually Is

SOC 2 is a security framework for companies that store customer data in the cloud. It’s not a certification you hang on the wall. It’s an audit report that proves your security controls work.

The five trust service criteria:

Security - Protection against unauthorized access
Availability - System uptime and operational performance
Processing Integrity - Complete, valid, accurate processing
Confidentiality - Protection of confidential information
Privacy - Collection, use, retention, and disposal of personal information

Most B2B SaaS companies pursue “SOC 2 Type II” which means auditors verify your controls worked consistently over 6-12 months.

The Real Cost of SOC 2

Let me break down what SOC 2 actually costs.

Direct costs:

First audit: $15K-50K depending on company size
Annual audits: $10K-30K after first year
Compliance platform (Vanta, Drata): $12K-40K/year
Fractional CISO or security consultant: $5K-15K/month for 6 months

Total first year: $50K-150K

Hidden costs:

Engineering time implementing controls: 200-400 hours
Documentation and policy writing: 100-200 hours
Ongoing maintenance: 10-20 hours/month
Opportunity cost of not shipping features

One founder told me: “We spent nine months on SOC 2. That’s nine months we weren’t building features our existing customers wanted.”

When You Should Pursue SOC 2

Signal #1: Enterprise Customers Are Asking

If three or more enterprise prospects ask for SOC 2 in sales calls, it’s time.

Not “it would be nice to have.” They’re asking specifically: “Are you SOC 2 compliant? Can we see your report?”

That’s the signal.

Signal #2: You’re Raising Series A or Beyond

Many VCs now require SOC 2 for Series A investments, especially if you handle customer data. They want to see you take security seriously before writing big checks.

I’ve seen deals get held up because startups didn’t have SOC 2. The VC still invested, but at a lower valuation with security requirements in the term sheet.

Signal #3: You’re in a Regulated Industry

If you’re in healthcare (HIPAA), finance (PCI DSS), or handle sensitive data, SOC 2 becomes table stakes faster.

Enterprise customers in these industries won’t even talk to you without it.

Signal #4: You Have 6-12 Months of Runway

SOC 2 takes time. You need:

2-3 months to implement controls
6-12 months of operating those controls consistently
1-2 months for the actual audit

If you’re raising in 4 months, you won’t have SOC 2 in time. Start earlier or wait until after the raise.

Signal #5: You Can Dedicate Resources

SOC 2 isn’t “set it and forget it.” Someone needs to own it:

Maintain policies and documentation
Monitor security controls
Respond to audit requests
Keep evidence organized

If your team is maxed out shipping product, SOC 2 will suffer. Either hire help or wait.

When You Should NOT Pursue SOC 2

Don’t Pursue If: You’re Pre-Product/Market Fit

If you’re still figuring out what you’re building and who wants it, SOC 2 is premature.

Build your product. Get paying customers. Figure out product-market fit. Then worry about compliance.

One startup spent $60K on SOC 2 before they had 10 customers. Six months later they pivoted to a completely different product. The SOC 2 report was worthless.

Don’t Pursue If: No One’s Asking Yet

“But we’ll need it eventually!”

Maybe. But spending $100K now on something you might need in 18 months doesn’t make sense.

Focus on basic security hygiene instead. You can always get SOC 2 later when customers actually ask.

Don’t Pursue If: You Only Have SMB Customers

Small and mid-size businesses rarely require SOC 2. They care about:

Does your product work?
Is the price reasonable?
Can they trust you?

SOC 2 matters when you’re selling to enterprises with procurement teams and security requirements.

Don’t Pursue If: You Can’t Afford It

If $100K would drain your runway or force you to cut headcount, wait.

Better to build a great product and raise money than to have a SOC 2 report and no runway.

The 2026 Reality: What’s Changed

Auditors Dig Deeper Now

In 2024, some companies treated SOC 2 as a checkbox exercise. Write policies, get the report, move on.

In 2026, auditors actually verify your controls work consistently. They want:

Evidence controls operated for 6-12 months
Logs showing monitoring happened
Proof of access reviews
Documentation of incident responses

One startup had great policies but couldn’t prove they actually used them. Audit failed. Had to start over.

Automation Is Now Expected

Manual compliance tracking doesn’t work at scale. Successful companies use platforms like Vanta, Drata, or Secureframe that:

Continuously monitor controls
Auto-collect evidence
Alert when things drift out of compliance
Make audits 10x easier

Without automation, you’ll spend 40+ hours/month just collecting evidence for the auditor.

Multi-Framework Thinking

Smart startups build systems that satisfy multiple frameworks at once:

SOC 2 for US enterprise customers
GDPR for European customers
HIPAA if you’re in healthcare
ISO 27001 for international markets

The controls overlap significantly. Don’t optimize for just SOC 2.

How to Prepare (Without Actually Starting SOC 2)

If you’re not ready for SOC 2 but want to prepare:

Build Basic Security Hygiene

These practices make SOC 2 easier later:

Use established auth providers (Auth0, Clerk)
Implement MFA for your team
Never commit secrets to Git
Use password managers
Enable HTTPS everywhere
Keep software updated

Cost: $100-500/month Time: 1-2 weeks setup

This is stuff you should do anyway, SOC 2 or not.

For more on basic security practices, see our guide on Building Your First Engineering Team.

Document as You Go

Start documenting:

Your architecture and data flows
Security policies (even basic ones)
How you handle incidents
Access control procedures

Even simple docs help. When you do start SOC 2, you won’t be starting from zero.

Use Good Tools from Day One

Pick tools that support compliance:

Cloud providers with SOC 2 reports (AWS, GCP, Azure)
Auth providers with security certifications
Monitoring tools with audit logs (Datadog, New Relic)
Password managers (1Password, Bitwarden)

Changing tools mid-SOC 2 is painful. Start with compliant tools.

Track Your Vendors

Maintain a simple spreadsheet:

What vendors do you use?
What data do they access?
Do they have SOC 2 or other certifications?

You’ll need this for SOC 2 anyway. Start tracking now.

The Timeline: How Long It Really Takes

Here’s what actually happens:

Months 1-2: Setup

Choose compliance platform
Hire fractional CISO or consultant
Implement missing controls
Write or update policies

Months 3-8: Observation Period

Operate controls consistently
Collect evidence automatically
Fix issues as they arise
Conduct internal audits

Months 9-10: Audit Prep

Choose audit firm
Review evidence gaps
Train team on audit process
Complete documentation

Months 11-12: Audit

Auditor reviews everything
You respond to questions
Auditor issues report
You can share with customers

Total: 12-18 months from start to finish

Anyone promising “SOC 2 in 3 months” is either lying or cutting corners that will come back to bite you.

The Real Enterprise Deal Blocker

Here’s what kills deals:

Not having SOC 2 when customers ask is a blocker. But so is:

Starting it too late (can’t close deals while waiting for report)
Failing the audit (worse than not having one)
Having a report with qualified opinions (red flags in the audit)

One startup rushed through SOC 2 to close a deal. Got the report, but it had three exceptions (things that failed). The customer walked.

Better to delay the deal while you do it right than to have a bad report.

Alternative: Security Questionnaires

If you’re not ready for SOC 2, some enterprise customers will accept:

Detailed security questionnaire responses
Architecture review meetings
Penetration test results
References from other customers

This won’t work for banks or healthcare companies, but it might buy you time with less regulated industries.

How to Speed Up SOC 2 (Legally)

Want to get there faster? Here’s what actually works:

Use a Compliance Platform from Day One

Vanta, Drata, or Secureframe reduce the work by 70%. They:

Tell you exactly what controls you need
Monitor them automatically
Collect evidence continuously
Make audits smoother

Starting with a platform vs doing it manually saves 3-6 months.

Hire Expertise Early

A fractional CISO who’s done this before will:

Prevent mistakes that delay the audit
Know what auditors actually care about
Keep the project on track
Make sure you pass the first time

DIY SOC 2 almost always takes longer and costs more than hiring help.

Choose Audit Firm Early

Don’t wait until month 10 to choose your auditor. Engage them in month 3-4 for:

Readiness assessment (they tell you what’s missing)
Guidance during observation period
Faster audit when you’re ready

Some audit firms are booked 2-3 months out. Plan ahead.

The Bottom Line

Pursue SOC 2 when:

Enterprise customers are specifically asking for it
You’re raising Series A or later
You have the budget and resources
You have 12-18 months to do it right

Don’t pursue SOC 2 if:

You’re pre-product/market fit
No customers have asked yet
You can’t dedicate time and money
You’re raising capital in under 6 months

The worst thing you can do is start SOC 2, run out of money halfway through, and have neither compliance nor runway.

Better to focus on basic security hygiene and tackle SOC 2 when the business actually needs it.

Need help deciding if SOC 2 makes sense for your stage? Want guidance on Technical Due Diligence or choosing a CTO? Book a call to discuss your security roadmap.