What is SOC 2 Compliance? Complete Guide for 2025

TL;DR: Quick Takeaways

•SOC 2 is a security audit framework for service organizations handling customer data
•Certification typically takes 30-90 days and costs between $5K-$40K
•Required for B2B SaaS companies pursuing enterprise customers
•Focuses on five Trust Service Criteria: Security, Availability, Confidentiality, Privacy, and Processing Integrity

If you're a B2B SaaS company trying to close enterprise deals, you've probably heard the question: "Are you SOC 2 compliant?" For many startups, this moment marks a critical turning point—either you have the certification and can move forward, or you don't and the deal stalls.

SOC 2 has become the de facto security standard for service organizations, especially those handling sensitive customer data. But what exactly is SOC 2? Why does it matter? And how can you achieve compliance without breaking the bank or spending six months on it?

In this comprehensive guide, we'll break down everything you need to know about SOC 2 compliance—from the basics to implementation strategies that actually work.

What is SOC 2?

SOC 2 (System and Organization Controls 2) is an auditing procedure developed by the American Institute of Certified Public Accountants (AICPA) that ensures service providers securely manage customer data to protect the interests of their clients and the privacy of their data.

Unlike compliance frameworks like PCI-DSS or HIPAA that are legally mandated for specific industries, SOC 2 is voluntary. However, it's increasingly required by enterprise customers as a condition for doing business.

The Five Trust Service Criteria

Security:Protection against unauthorized access (required for all SOC 2 audits)
Availability:System uptime and accessibility
Confidentiality:Protection of confidential information
Privacy:Personal information collection, use, retention, and disclosure
Processing Integrity:System processing is complete, accurate, timely, and authorized

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Trust Service Criteria Diagram

Who Needs SOC 2 Compliance?

While SOC 2 is technically voluntary, certain types of companies will find it practically essential for business growth. Here's who should prioritize SOC 2 certification:

✅ You Need SOC 2 If:

✓ You're a B2B SaaS company
✓ You store or process customer data
✓ You're selling to enterprise customers
✓ You're in fintech, healthtech, or HR tech
✓ Customers are asking for security documentation
✓ You're raising a Series A or beyond

⚠️ You Might Not Need It If:

• You're B2C focused
• You're pre-revenue or MVP stage
• Your customers haven't requested it
• You don't handle sensitive data
• You're in a very early stage

💡 Pro Tip:

Don't wait until you lose a deal to start your SOC 2 journey. Many companies begin the certification process when they start having sales conversations with enterprise prospects—typically around Series A or when ARR hits $1-2M.

SOC 2 Type 1 vs Type 2: What's the Difference?

There are two types of SOC 2 reports, and understanding the difference is crucial for planning your certification timeline:

SOC 2 Type 1

Evaluates your security controls at a specific point in time. It verifies that your controls are properly designed.

Timeline: 4-6 weeks
Audit Duration: 1-2 days
Best For: Quick market entry
Limitations: Less trusted by enterprises

SOC 2 Type 2

Evaluates your security controls over a period of time (usually 3-12 months). It verifies both design and operating effectiveness.

Timeline: 3-12 months
Audit Duration: 1-2 weeks
Best For: Enterprise sales
Preferred By: Most large customers

Our Recommendation: If you have the time, go straight for Type 2. However, if you're actively losing deals, start with Type 1 and run it in parallel with your Type 2 observation period. This gives you something to show customers immediately while working toward the full certification.

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Key SOC 2 Requirements

SOC 2 doesn't prescribe specific controls—instead, it requires you to document and implement controls that address the Trust Service Criteria relevant to your organization. Here are the most common requirements:

🔐 Access Control & Authentication

• Multi-factor authentication (MFA) for all systems
• Role-based access control (RBAC)
• Password policies and management
• Regular access reviews
• Offboarding procedures

📝 Documentation & Policies

• Information security policy
• Incident response plan
• Business continuity plan
• Vendor management policy
• Acceptable use policy
• Data classification policy

🔄 Change Management

• Documented change approval process
• Code review procedures
• Testing and deployment procedures
• Rollback capabilities
• Change logs and documentation

🛡️ Security Monitoring

• Log management and retention
• Security information and event monitoring (SIEM)
• Vulnerability scanning
• Intrusion detection/prevention
• Annual penetration testing

🎓 Security Awareness Training

• Annual security training for all employees
• Phishing simulation and testing
• Training documentation and tracking
• Acknowledgment of policies

How Long Does SOC 2 Take?

The timeline for SOC 2 certification varies significantly based on your starting point, but here's what you can typically expect:

Typical SOC 2 Timeline

1-2W

Readiness Assessment

Gap analysis, scope definition, and initial planning

2-4W

Remediation & Implementation

Close gaps, implement missing controls, document policies

3-12M

Observation Period (Type 2 Only)

Demonstrate controls operating effectively over time

1-2W

Audit

Independent auditor reviews and tests your controls

1-2W

Report Issuance

Receive your official SOC 2 report

⚡ Fast Track Option:

With automation and expert guidance, companies can achieve SOC 2 Type 1 in as little as 30 days. LowerPlane customers average 32 days from start to certification for Type 1, with Type 2 following after a 3-month observation period.

How Much Does SOC 2 Cost?

SOC 2 compliance costs vary widely depending on your approach, company size, and complexity. Here's a breakdown:

DIY Approach

$15K-25K

• Auditor fees: $8K-15K
• Tools & software: $5K-8K
• Consultant hours: $2K-5K
• Internal time: 200+ hours

BEST VALUE

Automated Platform

$5K-15K

• Platform fee: $5K-10K
• Auditor fees: Included or $5K
• Expert guidance: Included
• Internal time: 20-40 hours

Full-Service

$25K-50K+

• Consulting: $15K-30K
• Auditor fees: $10K-20K
• Ongoing: $10K-20K/year
• Internal time: 50-100 hours

💰

Cost Comparison Chart

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Key Takeaways

1
SOC 2 is essential for B2B SaaS companies selling to enterprise customers—it's no longer optional if you want to compete.
2
Type 2 certification is preferred by most enterprise customers, but Type 1 can help you close deals faster while working toward Type 2.
3
Traditional consulting can cost $25K-$50K+ and take 6+ months, but modern automated platforms can get you certified in 30 days for under $10K.
4
Start your SOC 2 journey before you need it—waiting until you've lost deals costs more in lost revenue than the certification itself.
5
Automation is key: 40-50% of SOC 2 requirements can be automated through integrations with your existing tools.

Frequently Asked Questions

How much does SOC 2 cost for a startup?

For startups, SOC 2 typically costs between $5K-$25K for the initial certification. The most cost-effective approach is using an automated compliance platform like LowerPlane ($4,995-$9,995) which includes auditor fees, automated evidence collection, and expert guidance. Traditional consulting firms charge $25K-$50K+, making them prohibitively expensive for early-stage companies.

Can I get SOC 2 certified in 30 days?

Yes! SOC 2 Type 1 can be achieved in 30 days if you already have basic security practices in place and use an automated platform. However, SOC 2 Type 2 requires a 3-12 month observation period to demonstrate that controls are operating effectively over time. Many companies start with Type 1 to unblock deals immediately while working on Type 2 in parallel.

What's the difference between SOC 2 and ISO 27001?

SOC 2 is a US-based auditing standard focused on service organizations, while ISO 27001 is an international standard for information security management systems. SOC 2 is more common in the US market and typically required for B2B SaaS companies. ISO 27001 is more recognized globally and in Europe. The good news: there's 80-90% overlap in requirements, so achieving one makes getting the other much easier.

Do I need a consultant to get SOC 2 certified?

While you don't technically need a consultant, having expert guidance significantly increases your chances of passing on the first try and reduces the time investment. Modern compliance platforms like LowerPlane provide dedicated advisors as part of the service, giving you the benefits of consulting at a fraction of the cost. Going completely solo is risky and often takes 2-3x longer.