When a prospect asks, "Do you have SOC 2?" the answer needs to be more specific than yes or no. There are two types of SOC 2 reports, and they serve different purposes. Understanding the difference will help you plan your compliance roadmap and set the right expectations with customers.
SOC 2 Type I: A snapshot
A Type I report evaluates whether your security controls are designed appropriately at a single point in time. The auditor comes in, reviews your policies, examines your controls, and issues a report that says, "As of [date], this company has controls in place that are suitably designed to meet the SOC 2 Trust Service Criteria."
Think of it as a photograph. It shows what your security posture looks like right now. It does not prove that your controls have been working consistently over time.
Timeline: 4 to 8 weeks of preparation, 2 to 4 weeks of audit. Total elapsed time from kickoff to report: 2 to 3 months.
Cost: $10,000 to $25,000 for the audit itself, plus $5,000 to $15,000 per year for a compliance automation platform if you use one (recommended).
SOC 2 Type II: A movie
A Type II report evaluates whether your controls are operating effectively over a period of time, typically 6 to 12 months. The auditor reviews evidence that your controls were consistently followed throughout the observation period. Did you actually perform those quarterly access reviews you documented? Did your monitoring actually alert on security events? Did terminated employees actually lose access within 24 hours?
Think of it as a movie. It shows that your security posture is consistent and sustained, not just a one-time setup that you did for the audit and then abandoned.
Timeline: 6 to 12 month observation period after Type I controls are in place, followed by 4 to 6 weeks of audit. Total elapsed time: 9 to 15 months from the start of your compliance journey.
Cost: $15,000 to $40,000 for the audit, plus ongoing costs for maintaining controls and the compliance platform.
Which one do you need?
Start with Type I if you have never been SOC 2 audited. Type I gets you a report you can share with prospects within 2 to 3 months. It demonstrates that you take security seriously and have built the foundation. Most enterprise prospects will accept a Type I report from a startup, especially if you can show that you are working toward Type II.
Plan for Type II within 12 months of your Type I report. Larger enterprise customers and regulated industries (healthcare, financial services) will eventually require Type II. The transition from Type I to Type II is straightforward if you have been consistently following your controls. The auditor just needs to see evidence over the observation period.
Go directly to Type II if you have been operating with strong security practices for at least 6 months and have the evidence to prove it. Some auditors will allow you to skip Type I and go straight to Type II with a 6-month observation period. This saves you the cost of two separate audits.
Common mistakes
Treating it as a one-time project. SOC 2 is not "set it and forget it." Your Type II audit must be renewed annually. The controls need to be followed every day, not just during audit season. If you implement controls for the audit and then stop following them, your next audit will have findings.
Over-scoping. SOC 2 has five Trust Service Criteria: security, availability, processing integrity, confidentiality, and privacy. You do not need all five. Start with security only, which covers about 80% of what enterprise customers ask about. Add criteria later if specific customers require them.
Choosing the wrong auditor. Not all CPA firms are equal. Find an auditor who has experience with SaaS companies and understands cloud-native infrastructure. A firm that primarily audits manufacturing companies will waste your time asking questions that do not apply to your business.
Skipping the compliance platform. Tools like Vanta, Drata, and Secureframe cost $5K to $15K per year but save you hundreds of hours in evidence collection. They integrate with your cloud providers, identity providers, and HR tools to continuously monitor your controls and collect evidence automatically. Without them, you are manually taking screenshots and writing reports, which is both painful and error-prone.
The ROI
SOC 2 compliance costs $25,000 to $60,000 in the first year (audit plus tooling). A single enterprise deal at $100K+ ACV pays for it multiple times over. More importantly, having SOC 2 removes a blocker from your sales pipeline. Instead of losing deals to "we need to see your SOC 2 report," you hand them the report and move to the next step in the sales cycle.
If you are ready to start your SOC 2 journey, book a call with our security team. We will help you scope the engagement, select an auditor, and get audit-ready in the shortest time possible.