Compliance
SOC 1
Quick definition
Attestation report focused on internal controls over financial reporting (ICFR). Relevant for vendors whose services affect customers' financial statements.
SOC 1 (formerly SSAE 16 / SAS 70) focuses on financial reporting controls — relevant for payroll providers, accounting platforms, transaction processors. Less common than SOC 2 for startups. If your product is part of a customer's financial close (e.g., revenue platform, billing platform), enterprise customers may require it. Otherwise SOC 2 is the right target.
Related compliance terms
SOC 2 Type I vs Type II
Type I attests controls are designed correctly at a point in time; Type II attests they operated effectively over 6–12 months.
HIPAA Compliance for Startups
Healthcare Information Privacy regulation governing protected health information (PHI). Required for any startup handling patient data.
GDPR (for US Startups)
EU General Data Protection Regulation governing how you handle personal data of EU residents — even if you're a US company.
CCPA / CPRA
California Consumer Privacy Act (2020) + California Privacy Rights Act (2023). Grants California residents data privacy rights similar to GDPR.
Frequently asked questions
- What is SOC 1?
- SOC 1 (formerly SSAE 16 / SAS 70) focuses on financial reporting controls — relevant for payroll providers, accounting platforms, transaction processors. Less common than SOC 2 for startups. If your product is part of a customer's financial close (e.g., revenue platform, billing platform), enterprise customers may require it. Otherwise SOC 2 is the right target.
- Why is SOC 1 important for startups?
- SOC 1 is a compliance concept that matters for startup founders because it directly affects fundraising readiness, financial decision-making, or operational discipline at the stage where mistakes are expensive to undo. Founders who understand it have a meaningfully easier time in diligence, board meetings, and investor conversations.
- What category does SOC 1 belong to?
- SOC 1 is a Compliance term in the StartupCFO finance glossary — alongside other compliance concepts that founders, CFOs, and accountants use in daily startup operations and reporting.
- Where can I learn more about SOC 1?
- Beyond this definition, see the related compliance terms below, or explore StartupCFO's insights and tools that put SOC 1 in context. For specific situations, talk to a fractional CFO who can walk through your numbers.
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