SOC 1 vs SOC 2 vs SOC 3: Which Report Does Your Startup Need?
Security questionnaire lands in your inbox. Line 34: "Do you have a SOC report?"
You know SOC 2. You've heard of SOC 1. You have no idea what SOC 3 is. And you don't know which one the buyer actually needs. This comparison cuts through the confusion.
Quick Answer
| Report | Who Needs It | Covers | Publicly Shareable | |---|---|---|---| | SOC 1 | Payroll processors, HR platforms, financial SaaS | Financial reporting controls | No (restricted) | | SOC 2 | Most B2B SaaS companies | Data security, availability, privacy | No (restricted) | | SOC 3 | Companies wanting public trust signals | Same as SOC 2 (summarized) | Yes (public) |
SOC 1: Financial Controls
SOC 1 (governed by SSAE 18) evaluates controls relevant to a customer's financial reporting. If your product affects how a customer produces their financial statements — think payroll software, expense management, or accounts payable automation — your customers' auditors may require a SOC 1 report.
SOC 1 is NOT a security certification. It says nothing about data privacy or cybersecurity controls. It only addresses controls that could affect financial statement accuracy.
Who needs SOC 1:
- Payroll and HR platforms (Gusto, Rippling tier)
- Financial data processors
- Accounting software with general ledger write access
- Healthcare revenue cycle management
Who doesn't need SOC 1: Most SaaS startups. Unless your product literally touches your customers' financial books, skip this one.
Like SOC 2, SOC 1 comes in Type I (design of controls, point-in-time) and Type II (operating effectiveness over 6–12 months). See our SOC 2 Type I vs Type II guide for a deep dive on the Type distinction — the same logic applies to SOC 1.
SOC 2: The One Most Startups Actually Need
SOC 2 evaluates how well you protect customer data across five Trust Service Criteria: Security (required), Availability, Processing Integrity, Confidentiality, and Privacy.
Most B2B SaaS startups need SOC 2 Type II to close enterprise deals. The full breakdown is in our SOC 2 Type I vs Type II complete guide, but here's the summary:
SOC 2 Type I: "Your controls exist and look good" — point-in-time, 6–12 weeks to achieve, $15K–$30K.
SOC 2 Type II: "Your controls have been working for months" — 6–12 month observation period, $30K–$80K total.
SOC 2 reports are restricted. You share them under NDA with specific customers and prospects. You cannot post your SOC 2 report on your website. This is by design — the report contains detailed information about your security controls that could be useful to attackers.
Who needs SOC 2:
- Any B2B SaaS selling to mid-market or enterprise customers
- Apps handling personal, health, or financial data
- Cloud platforms used by regulated industries
SOC 3: The Public Trust Signal
SOC 3 is essentially a condensed, public-facing version of SOC 2. Same auditor, same audit procedures, same Trust Service Criteria — but the report is a high-level summary suitable for publishing on your website or marketing materials.
SOC 3 doesn't replace SOC 2. Enterprise buyers will still ask for your SOC 2 report (with detail). SOC 3 is the badge you put on your security page and trust center.
Why get SOC 3:
- Demonstrates compliance to prospects before they're far enough in the sales cycle to request your full SOC 2
- Useful for a public-facing security page
- Shows security commitment to investors
Who typically gets SOC 3: Larger companies with active enterprise sales. Early-stage startups usually skip SOC 3 — the cost isn't worth it until you're already investing in SOC 2 and have a high-volume enterprise pipeline.
Cost: Usually a small add-on ($2K–$5K) if you're already getting SOC 2. Don't pursue it standalone.
The Decision Framework
Are you a payroll, HR, or financial data processor? → Yes: Pursue SOC 1 Type II (and likely SOC 2 as well) → No: Skip SOC 1
Do you have enterprise customers or prospects asking for security documentation? → Yes: SOC 2 Type II is your priority. Start building your security program now. → No: Not yet, but plan for it. Build the controls while your team is small.
Do you have an active enterprise pipeline and want to accelerate deals? → Add SOC 3 alongside your SOC 2 renewal.
Are you pre-revenue or very early stage? → Focus on security fundamentals first. SOC 2 can wait until your first enterprise prospect asks.
Cost and Timeline Summary
| Report | Timeline | Cost | |---|---|---| | SOC 1 Type I | 6–12 weeks | $15K–$30K | | SOC 1 Type II | 9–15 months | $30K–$70K | | SOC 2 Type I | 6–12 weeks | $15K–$30K | | SOC 2 Type II | 9–15 months | $30K–$80K | | SOC 3 (add-on to SOC 2) | No additional time | $2K–$5K |
Also relevant: VAPT and penetration testing is a prerequisite for a credible SOC 2 Type II — schedule it early in your observation period.
Ready to start? Talk to our team — we've helped startups go from zero to SOC 2 Type II in under 9 months.