SOC 2 for startups may seem like a difficult endeavor given the moving parts involved in launching and maintaining a successful startup. From funding to revenue, it can be easy to neglect compliance examinations like a SOC 2 Examination – or delay completing one until a future date. Since you cannot escape compliance requirements, the reality is that is no better time to undergo a SOC 2 Examination, and it might help your startup reach new heights. Below are the top reasons why your startup should complete a SOC 2 Examination.
It Builds Credibility with Banks and Investors
Startups and banks can have a complicated and challenging relationship: while startups are fast-paced, young, and agile, banks can be slower, more regulated, and have complicated approvals to fund startups.
Often banks and startups find themselves clashing over processes and cultures – which is why it’s important for startups to eliminate any roadblocks. Completing a SOC 2 Examination as a startup is a fantastic way to demonstrate your security and ease security-related concerns that a bank may have. You’ll also be better prepared to answer the bank’s questions relating to security and compliance, as well as stand out from other startups in your field.
It Gives You a Competitive Advantage
These days, it seems like major security breaches are striking organizations large and small across the globe. Launching a startup can be difficult enough without worrying if you’re a target for a major data breach – but being prepared can be enough to differentiate yourself from your competition.
Undergoing a SOC 2 Examination demonstrates to your current and prospective customers that your organization maintains a strong security posture that includes the implementation of controls to protect and secure a customer’s confidential and personal data – building trust in the marketplace early.
You’ll Develop Strong Policies and Procedures
After undergoing a SOC 2 Examination, your organization will come out the other end with formally defined policies and procedures that describe the key processes and controls surrounding your organization and business operations. Departments and employees will know where to look if they have questions regarding their job role and how to complete their job responsibilities.
Not only do strong, formally defined policies and procedures impress banks, investors, employees, and customers, they also help employees better understand how to perform their day-to-day operations (such as building performance review systems or client contracts) and helps mitigate risks resulting from data breaches and hacks.
It’s Easier to Do at the Startup Stage
It may be tempting to delay completing a SOC 2 Examination at the infancy stage of your startup, but the reality is that you’ll likely need one in the future – and going through the audit process will only get more complicated as your organization grows. The reason why is simple: during the SOC 2 audit, various departments and personnel across the organization will be needed to assist in gathering the requested evidence for the examination. This is significantly easier when your team is in a small room together where the audit requests can be addressed quickly.
As you build your startup, going through a SOC 2 Examination during the infancy stages will help strengthen the controls environment and help your organization be better prepared for future compliance assessments – no matter what size your organization has grown into. A little work now can save you countless headaches in the future.
A SOC 2 is More Affordable Than Compliance Failure Fines
At the startup stage, assets can be tight, and organizations need to keep their costs to a minimum – this leaves little to no room for costly, yet easily avoidable, disruptions to business operations. While some disruptions to business operations are inevitable, completing a SOC Examination can help identify the major vulnerabilities and control gaps. A significant business disruption can cost your organization thousands of dollars a month, and the average cost of a data beach for an organization is $3.62 million. You wouldn’t rent an office space and leave the doors unlocked because not doing so could cost you everything.
Undergoing a SOC 2 Examination similarly helps protect your organization by bringing to focus potential vulnerabilities and control gaps that can potentially disrupt business operations. It might cost time and money now, but it’s a worthy investment – one that can save you even more time and money down the road, several times over.