SOC 2 vs ISO 27001: Which Should a Startup Get?
SOC 2 or ISO 27001 for your startup? Compare scope, cost drivers, buyer expectations and timelines, plus a simple rule for picking the right one first.
Pick SOC 2 if most of your customers are US companies that ask for a security report. Pick ISO 27001 if you sell mainly in Europe or to global enterprises that ask for a certificate. Many startups end up with both, but one is almost always the right first step.
This is general information, not legal or audit advice. Your auditor and your customers' security teams have the final say on what they accept.
What is the difference between SOC 2 and ISO 27001?
SOC 2 is an attestation report. An independent CPA firm examines your controls against the AICPA's Trust Services Criteria. Security is mandatory. Availability, confidentiality, processing integrity and privacy are optional extras you add based on what customers care about. You receive a report, not a certificate.
ISO 27001 is a certification of an information security management system (ISMS). A certification body audits whether you have a working management process: risk assessment, a statement of applicability, internal audits and continual improvement. You receive a certificate. See the ISO page for the standard for the official description.
| SOC 2 | ISO 27001 | |
|---|---|---|
| Output | Auditor's report | Certificate |
| Typical buyers | US B2B, especially mid-market and enterprise | Europe, Asia, global procurement |
| Focus | Whether controls are in place (Type 1) and work over time (Type 2) | Whether a management system exists and runs |
| Scope control | You choose which criteria to include | You define the ISMS scope |
| Validity | Report covers a period, refreshed yearly | Certificate cycle of three years with annual surveillance audits |
| Flexibility | Controls written by you | Annex A controls to select or justify excluding |
Which one do your buyers want?
Ask, before you spend anything. Look at the last five security questionnaires or lost deals. If the sentence "Do you have a SOC 2 report?" appears, start there. If procurement asks for "ISO 27001 certification", start there. Outreach from a sales rep is a good source of evidence, and so is the security page of your competitors.
Rules of thumb we'd use:
- US customers, fast sales cycles: SOC 2 Type 1 first, Type 2 within the next year.
- EU public sector, banks, large corporates: ISO 27001.
- Both markets: the controls overlap heavily, so doing one makes the second much cheaper.
What does each one cost in time and effort?
Exact fees vary a lot by auditor and company size, so we won't quote a number. The real cost drivers are the same for both:
- Scope. Fewer systems, fewer people and one product means less to evidence.
- Readiness. If you already enforce single sign-on, device management, access reviews and logging, the audit is mostly paperwork.
- Type 2 observation window. SOC 2 Type 2 requires evidence over a period, so the clock runs before you get the report.
- Tooling. Compliance automation platforms collect evidence from your cloud and HR tools. They save hours but do not replace an auditor.
What should you do before the audit?
- Write a short information security policy and an access control policy.
- Turn on multi-factor authentication everywhere and use a password manager for the team.
- Keep an inventory of systems and vendors.
- Run a basic risk assessment and keep the output.
- Set up background checks, onboarding and offboarding checklists.
- Log who gets access to production and review it on a schedule.
Many of these show up in the Security, Privacy & Compliance category, where tools for identity, monitoring and password management are listed. You can also browse the Woodander product directory for compliance tools used by other founders.
FAQ
Is SOC 2 legally required?
No. It is a market requirement set by your customers, not a law.
Is ISO 27001 harder than SOC 2?
Different, not strictly harder. ISO asks for a documented management system and risk process. SOC 2 asks for evidence that specific controls operate. Teams with strong engineering habits often find SOC 2 quicker, and teams with process discipline find ISO natural.
Can I do both at once?
Yes, and the overlap saves effort, but do not start both before you know that customers will ask for each.
What is the difference between SOC 2 Type 1 and Type 2?
Type 1 checks that controls are designed correctly at one point in time. Type 2 checks that they worked over a period.
Your next step: pull your last five security questionnaires, count which standard is named, and book a call with one auditor before you buy any tooling.
