May 23, 2023

Trust + Enterprise Clients = Million-Dollar Deals

Today’s enterprises have thousands of tools to choose from when it comes to building their tech stack. For B2B SaaS vendors, there’s a growing need to stand out from the competition by refining the market fit of their products, tailoring their marketing efforts, and consistently building trust. Not doing so can leave millions of dollars worth of contracts on the table — and that’s a risk scaling SaaS vendors can’t afford to make. 

So, how do you build trust?

Achieving trust through SOC 2 compliance 

With enterprises under more pressure than ever to abide by industry regulations and security standards. Plus, they have a responsibility to their shareholders to protect their assets from data breaches and other cybersecurity concerns. As a result, they’re looking for vendors that understand the current threat  and regulatory landscape. They want to partner with software providers that are as interested in upholding security best practices as they are, and they need to be able to see that commitment early on in the sales process

For vendors that are likely to process, manage, or store sensitive customer data, a great way to earn this trust is by achieving SOC 2 compliance. The SOC 2 standard has become the de-facto compliance program that enterprise clients lean on. This compliance process requires company leaders to have practices and systems in place to prevent data breaches, respond properly after breaches occur, and install alerts and tracking systems that reveal the who, when, and why behind any access gained to privileged files.

Being SOC 2 compliant means there is a process for everything your employees do, and everything is auditable. You may have the best internal security team, but if your processes aren’t documented and auditable, then they can’t be fully trusted. 

When to start with SOC 2

There is a strategic element around choosing when to go through your compliance journey. Waiting too long can ultimately lead you to lost opportunities with recognizable brands that could further grow your business. Plus, it’s important to note that SOC 2 compliance is not a simple and quick task — documenting processes can be much more time consuming than you imagine, getting consensus is challenging, and the larger your business is, the more complex it becomes. 

In our times as advisors for companies seeking SOC 2 compliance, we’ve observed two different types of businesses:

  • The ones that think ahead and start compliance early, as a parallel track to their product development.
  • The ones that decide to become compliant when the enterprise client is knocking at their door. 

Knowing that it takes anywhere from six–18 months to be ready for an audit, which type of business do you think misses out on most opportunities? (Spoiler alert: it’s the second one.)

As an entrepreneur, you know that each round of funding has its own value. Seed funding helps you define your MVP and Series A helps you turn your MVP into a valuable product with market fit. With Series B, you’re looking to consolidate your team and reach up to $10 million in ARR, and at Series C, you’re accelerating growth to up to $100 million in ARR. Now, would you rather close $10,000 deals or $100,000 deals on your path to $10 million? 

A SOC 2 report is your gateway to larger deals, so the time leading into your Series B funding is a great period to start your compliance journey. 

What it takes to get it right

A shared commitment to trust, integrity, and respect for sensitive data starts from the ground up, and building this culture is a process that starts on day one. Before company owners begin an extensive hiring process, they should recognize that established SOC 2 compliance sends a strong message that will influence the culture at every stage of the company’s growth. The longer hiring managers put this off, the harder it will be to ingrain this principle in new staff members.

If you’re a scaling software vendor that’s starting to target enterprise clients, your best bet in becoming a trusted vendor will be to complete your SOC 2 compliance journey. Regardless of what your ultimate goal is — whether it’s long-term growth, a public offering, or a sale — compliance with industry recognized standards will be a massive step in the right direction. 

Need help getting started with your SOC 2 journey? We’d love to help. Get in touch so we can chat about your goals. 

We’re here to help.

Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt.

Get Started
LEARN MORE!
Responsive Components
Responsive Components
Responsive Components
Hey! Have any questions?

Frequently Asked
Questions

What type of compliance standard can you help with?

We help our clients based on their needs. The majority of our contracts involve SOC-2, HIPAA, and most recently GDPR. Feel free to ask us if we can help with your particular case. If we aren't able to, we can most likely recommend you to someone who can.

How long does a SOC 2 engagement usually take?

We move as fast as our clients are able to make progress. Our fastest client to date got their SOC-2 Type I four months after signing our engagement letter. That record is up for grab if you are up for it.

In our experience however, it takes 6-9 months to achieve a SOC-2 Type I,  and 3-6 additional months to obtain a SOC-2 Type II report.

Which standard do you follow for your security policies?

All of our security policies follow the ISO-27001 standard. The Confidentiality, Integrity, and Availability standards cover the range of standards we like to work with for SOC 2.

Why do we have to become SOC 2 compliant if we are relying on AWS which is already compliant?

SOC 2 stands for Service Organization Control, meaning your clients are interested in understanding your controls, not your hosting provider’s control. As part of your vendor assessment we recommend reviewing AWS’ SOC 2 report, but relying on their report is not enough to become SOC 2 compliant.

Who is behind SOC 2?

The American Institute of CPAs. The AICPA is an established and respected organization that provides two forms of audits to companies that demonstrate evidence of a secure data-protection infrastructure. A Type I is a point in time audit that addresses the company’s description of its system, the suitability of the system’s design, and the effectiveness of its internal data controls. A Type II report happens over a period of time and emphasizes design and also focuses on the validity of the company’s controls.

Are SOC 2 reports a legal obligation?

No, but most enterprise level organizations that engage with sensitive data (again, almost all of them) have an obligation to their stakeholders to prove due diligence regarding data security, which means they’ll want to vet their service providers using this tool. SOC 2 can help these prospective service providers set themselves apart from the competition. Just as important, a SOC 2 report represents a meaningful and respected signifier of trust.

What can happen to a company without a SOC 2 report?

A lack of a SOC 2 report won’t result in legal problems, but it can and will limit outside assessments of the company’s commitment to data security. When large-scale clients look for providers, or large-scale backers look for a likely return on their investment, they don’t want concerns about security to stand in the way. Trust is a chain made of links that have each been put the test and have proven their ability to withstand pressure and scrutiny. Company leaders are wise to let SOC 2 auditors apply this pressure so their clients and backers don’t have to.

When is it too late for a SOC 2 audit?

Never. Even companies that have been in business for years but have never obtained a SOC 2 report can—and should—take steps in this direction now. Being compliant with SOC 2 can open the door to a broader base of more significant clients and larger contract opportunities. That being said, startups in the threshold of the marketplace, and new business owners who hope for an eventual public offering, should obtain a SOC 2 report during the development and financing process. By the time the company approaches Series B and C fundraising rounds, a report should be in hand.

How complicated is the auditing process?

The auditing process can be easy, or complicated depending on your level of preparation.

Preparing for the audit can take some time, attention, and the guidance of reliable data security experts. Don’t leave any part of this process to chance. Approach SOC 2 compliance one step at a time, and start by contacting a consulting firm with track record of experience in your area of the marketplace.