If you’re building an early-stage SaaS company, security and trust aren’t just buzzwords, they’re make-or-break signals for customers, partners, and investors. Somewhere along the way, you’ve probably come across two big names in the compliance world: SOC 2 and ISO 27001.
Both standards signal that your company takes data protection seriously. Yet, they serve slightly different purposes, follow different methodologies, and are often expected by different stakeholders. So, how do you choose between them or should you even try?
In this guide, we’ll break down the essential differences, use cases, and decision points, so you can confidently pick the right framework for your stage and strategy.
What Are SOC 2 and ISO 27001 (In Simple Terms)?
Let’s start with the basics, so along the way it’s easier to spot the differences.
SOC 2 is a U.S.-based reporting standard created by the AICPA (American Institute of Certified Public Accountants). It evaluates how well your company protects customer data across five “Trust Service Criteria”: security, availability, processing integrity, confidentiality, and privacy.
If you pass the audit. You don’t get a certificate, you get a report, issued by an auditor, that assesses whether your internal controls are working as claimed.
ISO 27001, on the other hand, is an international standard developed by the International Organization for Standardization. It requires you to build and maintain a formal Information Security Management System (ISMS), a complete system of policies, processes, risk assessments, and continual improvement mechanisms.
Here, you do get a certificate, issued by an accredited body, that proves your system meets the ISO benchmark.
| Aspect | SOC 2 | ISO 27001 |
|---|---|---|
| Origin | U.S. | International |
| Output | Audit report | Certification |
| Focus | Operational controls | Holistic system (ISMS) |
| Key areas | 5 Trust Principles | 114 Annex A controls |
| Popular with | U.S. SaaS buyers | Global enterprises & regulators |
| Timeline | 3–6 months | 6–12 months |
SOC 2 Type I vs Type II – What’s the Difference?
Even within SOC 2, there’s nuance that often confuses founders and operators.
SOC 2 Type I: Describes your controls at a specific point in time, it’s like taking a snapshot of your security environment. It’s faster and easier to obtain and is often used as a first milestone.
SOC 2 Type II: Evaluates how well your controls perform over a period of time, typically 3 to 12 months. Auditors look for consistent evidence that your processes are actually being followed.
Most startups begin with Type I to show intent and control design, and then graduate to Type II once they’ve had time to operationalize their practices.
Which One Fits Your Business?
Choosing between SOC 2 and ISO 27001 isn’t just a technical decision, it’s a strategic one. It depends on your go-to-market, team readiness, customer geography, and available resources.
Here are a few practical lenses to look through:
📍 Your customer base
Mostly U.S. B2B buyers? → SOC 2 is often the default ask.
Enterprise clients across multiple regions (e.g., EU, Asia)? → ISO 27001 may be required by procurement teams.
🛠️ Your internal maturity
No documented policies yet? → SOC 2 is generally easier to begin with.
Already using ITIL, COBIT or risk registers? → ISO 27001 will feel more natural.
💰 Budget & timeline
SOC 2 Type I costs can start around $10k–$20k, with fewer tooling and documentation demands.
ISO 27001 is a heavier lift, often starting at $25k+, depending on the auditor and scope.
👥 Your team’s background
If no one in your org has touched compliance before, SOC 2 is often less intimidating.
If you’ve hired security or ops professionals with ISO experience, it can accelerate certification.
Which Should You Choose?
| Scenario | Recommended Path |
|---|---|
| U.S.-only SaaS, pre-Series A | SOC 2 Type I or II |
| Working with EU clients or international procurement | ISO 27001 |
| Long sales cycles, high-value B2B | Both (SOC 2 first, then ISO) |
| Early-stage, lean team, no prior security processes | SOC 2 Type I as a stepping stone |
How to Prepare (Regardless of Framework)
No matter which path you pick, both SOC 2 and ISO 27001 demand a level of rigor and consistency in how your company operates. The biggest mistake? Treating compliance as a one-time project. Here’s how to avoid that:
Run a gap analysis: Tools like Humadroid or Vanta
Start simple: Document your security policies, access control procedures, and incident response plans. You’ll need them either way.
Automate where possible: Compliance automation tools save you time, create audit trails, and reduce the risk of human error.
Assign ownership: Compliance isn’t just for IT. Make sure product, HR, and engineering know their roles in maintaining security hygiene.
Compliance Isn't the Goal. Trust Is.
It’s easy to get lost in documentation, frameworks, and jargon. But in the end, these certifications aren’t the point. They’re proof that your company is worthy of trust from customers, partners, and investors.
So whether you start with SOC 2, ISO 27001, or both, remember:
✅ Build a culture of continuous improvement
✅ Use certifications as a growth enabler, not a bottleneck
✅ Focus on transparency, documentation, and accountability
Compliance might feel like a big undertaking when you’re juggling product development, hiring, and funding. But framing security as a core feature can be a powerful differentiator. Begin with a clear understanding of whether SOC 2, ISO 27001, or a combination of both best suits your current market needs. Then, lean on small, continuous improvements. Before you know it, you’ll have an audit-ready, security-first operation that sets your SaaS apart.
If you’re still weighing which standard fits best, talk it through with your team or ask your prospective clients what they value most. After all, the real goal is building trust that can help your business thrive. Feel free to share your thoughts with others in the same boat, you’re definitely not alone in navigating these frameworks.
