Startup Compliance Checklist: What You Actually Need
Stop over-engineering compliance. Here's exactly what to do at each stage, what to skip, and how much it should cost.
TL;DR for Founders
Pre-seed: Privacy policy + secure auth. Seed: Security questionnaires + basic policies. Series A: SOC 2 Type 2. Series B+: ISO 27001 + dedicated team. Don't do more than your stage requires.
Compliance by Startup Stage
Your compliance needs scale with your business. Here's exactly what to focus on at each stage.
Pre-Seed / MVP
Must Have
- •Basic privacy policy
- •Terms of service
- •Secure password storage (bcrypt/argon2)
- •HTTPS everywhere
- •Basic access controls
Nice to Have
- •Cookie consent banner
- •Data processing agreements
- •Security awareness for founders
Skip For Now
- •SOC 2 certification
- •ISO 27001
- •Dedicated security team
- •Expensive compliance tools
Seed Stage
Must Have
- •Security questionnaire responses ready
- •Vendor security assessment process
- •Employee onboarding/offboarding procedures
- •Incident response plan (basic)
- •Data backup and recovery
- •MFA for all critical systems
Nice to Have
- •SOC 2 Type 1 readiness
- •Penetration testing
- •Security training program
- •Bug bounty program
Skip For Now
- •Full ISO 27001 certification
- •In-house security team
- •Enterprise GRC platform
Series A
Must Have
- •SOC 2 Type 2 certification
- •Formal security policies
- •Vulnerability management program
- •Security awareness training
- •Third-party risk management
- •Business continuity plan
Nice to Have
- •ISO 27001 certification
- •GDPR compliance program
- •Dedicated security hire
- •Compliance automation platform
Skip For Now
- •Building everything in-house
- •Over-customizing controls
Series B+
Must Have
- •ISO 27001 certification
- •Dedicated security/compliance team
- •Comprehensive GRC program
- •Regular third-party audits
- •Advanced threat detection
- •Privacy program (GDPR, CCPA)
Nice to Have
- •SOC 2 + ISO 27001 + HIPAA (if applicable)
- •Security operations center
- •Red team exercises
- •AI governance (ISO 42001)
Skip For Now
- •Nothing - you need it all
5 Expensive Mistakes Startups Make
❌ Getting SOC 2 too early
SOC 2 costs $30-80K and takes 6-12 months. If you don't have enterprise customers asking for it, wait.
✓ Instead: Focus on security questionnaires and basic controls until you have real enterprise demand.
❌ Buying expensive compliance tools at seed stage
Enterprise GRC platforms cost $20-50K/year. You don't need them until Series A.
✓ Instead: Use spreadsheets, Notion, or free tiers until you have 20+ employees.
❌ Hiring a CISO before product-market fit
A good CISO costs $200-400K/year. You need product-market fit first.
✓ Instead: Use fractional CISO services ($2-5K/month) or security consultants.
❌ Ignoring compliance until an enterprise deal requires it
Rushing SOC 2 in 3 months costs 2-3x more and often fails.
✓ Instead: Start SOC 2 readiness 6-9 months before you expect to need it.
❌ Building custom compliance solutions
Your engineers should build product, not compliance tools.
✓ Instead: Use established platforms like Vanta, Drata, or Secureframe.
When Each Regulation Kicks In
| Regulation | Trigger | Priority | Est. Cost |
|---|---|---|---|
| GDPR | Any EU customers or users | High | $5K-50K to implement |
| CCPA/CPRA | $25M+ revenue OR 100K+ CA consumers | Medium | $10K-30K to implement |
| HIPAA | Any healthcare data (PHI) | Critical | $50K-200K to implement |
| SOC 2 | Enterprise customers requesting it | High | $30K-80K first year |
| ISO 27001 | Global enterprise or government customers | Medium | $50K-150K first year |
| PCI DSS | Processing credit card payments | Critical | $20K-100K depending on level |
| NYC LL144 | AI in hiring decisions for NYC candidates | High | $15K-50K for audit |
Frequently Asked Questions
When should a startup get SOC 2?
Get SOC 2 when enterprise customers are asking for it and you're losing deals without it. Typically Series A stage ($1-10M ARR). Starting earlier wastes money; starting later costs more due to rushing.
Do I need a security team as a startup?
Not until Series B ($10M+ ARR). Before that, use fractional CISO services ($2-5K/month), security consultants, and compliance automation platforms. Your first security hire should be around 50 employees.
What's the minimum viable compliance for a B2B SaaS startup?
Privacy policy, terms of service, HTTPS, secure authentication (MFA, proper password hashing), basic access controls, and the ability to answer security questionnaires. This covers 90% of early-stage needs.
How much should a startup budget for compliance?
Pre-seed: $0-2K. Seed: $5-20K. Series A: $30-100K. Series B+: $100-500K+. The biggest cost is usually SOC 2 certification ($30-80K) and compliance automation tools ($10-30K/year).
Should I use a compliance automation platform?
Yes, if you're pursuing SOC 2 or ISO 27001. Platforms like Vanta, Drata, or Secureframe cost $10-30K/year but save 50-70% of the time and effort. ROI is clear at Series A stage.
What if an enterprise customer needs SOC 2 and I don't have it?
Options: (1) Offer a security questionnaire + penetration test results, (2) Propose a contract clause committing to SOC 2 within 12 months, (3) Offer additional security controls specific to their data. Many enterprises will accept alternatives for promising startups.
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