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SOC 2 type 1 vs type 2

SOC 2 Type 1 vs SOC 2 Type 2: Which Should You Choose?

Both Type 1 and Type 2 SOC 2 reports require an audit by a qualified service auditor or CPA firm. So, which one is right for your organization? The choice often comes down to your timelines and current readiness.


If you're looking to demonstrate compliance quickly—especially if an enterprise client requires it to close a deal—a Type 1 report is a great short-term solution. It evaluates your current controls at a specific point in time, which is ideal if your company is early-stage or has recently implemented new security systems. It shows that your controls are in place, even if they haven't been operating long enough to undergo a Type 2 assessment.


On the other hand, a Type 2 report takes longer (typically 3-12 months) as it evaluates whether your controls are not only designed well but also function effectively over a period of time. This provides deeper assurance to customers, especially for those seeking long-term partnerships with companies that have a mature security posture.


PRO TIP: If you're short on time and resources, a Type 1 report can quickly show clients you're secure and help close the deal.

Industries That Typically Choose SOC 2 Type 1

Organizations that need to quickly demonstrate security compliance—such as startups or those in the middle of implementing new systems—should consider a Type 1 report. It’s perfect for companies looking to secure deals quickly, without the need for long-term control evaluations.


  • Startups/Tech Startups - Companies in early growth stages that need to quickly demonstrate security controls to win deals or investment.
  • SaaS Providers - New SaaS companies needing to show they have basic security controls in place, especially when approaching enterprise customers.
  • Fintech Startups - Young fintech firms looking to secure partnerships with financial institutions or demonstrate security compliance to regulators.
  • Healthtech Startups - Early-stage healthcare tech companies seeking to comply with HIPAA or other regulations while proving their initial security measures.
  • E-commerce Startups - Online retailers who need to quickly show security compliance to payment processors or suppliers.

Industries That Typically Choose SOC 2 Type 2

Organizations handling sensitive customer data and seeking long-term assurance should aim for a Type 2 report. It offers proof that your controls work effectively over time and signals to enterprise clients that your security practices are reliable and mature.


  • Financial Services - Banks, investment firms, and credit unions need long-term assurance that their security controls are effective over time.
  • Healthcare Providers/Healthtech Companies - Organizations handling sensitive health data, such as telemedicine platforms or hospitals, need to prove ongoing security compliance (e.g., HIPAA).
  • Large SaaS Companies - Mature SaaS providers looking to secure long-term enterprise deals by proving sustained security practices over time.
  • E-commerce Platforms - Large e-commerce platforms or those dealing with sensitive customer payment data need Type 2 to ensure security effectiveness for payment processors and customers.
  • Cloud Service Providers - Companies offering cloud storage, processing, or hosting solutions to enterprise customers, where security must be reliable and maintained continuously.

FAQ

What is the difference between SOC 2 Type 1 and Type 2?

SOC 2 Type 1 evaluates the design of your controls at a specific moment, while SOC 2 Type 2 assesses both the design and effectiveness of those controls over a set period (typically 3-12 months).

Who needs to be SOC 2 Type 1 compliant?

Organizations that need to quickly demonstrate security compliance—such as startups or those in the middle of implementing new systems—should consider a Type 1 report. It’s perfect for companies looking to secure deals quickly, without the need for long-term control evaluations.

Who needs to be SOC 2 Type 2 compliant?

Organizations handling sensitive customer data and seeking long-term assurance should aim for a Type 2 report. It offers proof that your controls work effectively over time and signals to enterprise clients that your security practices are reliable and mature.

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