Type 1 vs Type 2: How to Choose the Right SOC 2 Report

Type 1 vs Type 2: How to Choose the Right SOC 2 Report

If SOC 2 is your ticket into enterprise sales, then choosing the right type of report is the first decision point. Too many executives rush in without understanding the difference between Type 1 and Type 2 and end up with the wrong report for their stage of growth.

I’m hoping to break this down into simple terms so can make the right call.

SOC 2 Type 1: The Snapshot

A Type 1 report looks at your controls at a single point in time.

• What it proves: You’ve designed the right policies, procedures, and systems.
• How it’s tested: Auditors review documentation and configuration “as of” a given date.
• Timeline: Can often be completed in weeks once you’re ready.
• When it works best:
  • Early-stage companies preparing for enterprise sales.
  • Startups who need something credible for procurement, but don’t have a year of control history yet.
  • As a stepping stone toward Type 2.

Analogy for execs: Type 1 is like showing you’ve drawn up blueprints for a house and that the foundations look solid.

SOC 2 Type 2: The Long-Term Proof

A Type 2 report goes further: it validates not just the design of controls, but that they operated effectively over a defined period (usually 6–12 months).

• What it proves: You’re not just promising good security you’ve been living it, consistently.
• How it’s tested: Auditors sample evidence across the review period (e.g., user access reviews, logging, incident responses).
• Timeline: Minimum 6 months of operating history, with some companies opting for a 12-month window.
• When it works best:
  • Companies targeting banks, insurers, or other regulated clients.
  • Growth-stage firms facing detailed vendor risk assessments or seeking investment.
  • When you want to accelerate procurement and eliminate sales bottlenecks.

Analogy for execs: Type 2 is like showing an inspector 12 months of maintenance bills, proof you manage it as designed.

Key Differences at a Glance:

How to Decide: A Simple Framework

Ask yourself three questions:

1. Who are your clients today?
   • If you’re selling to mid-market or startups → Type 1 may be enough.
   • If you’re targeting banks, insurers, or Fortune 500s → you’ll need Type 2.
2. What stage is your company at?
   • Seed/Series A → start with Type 1 to get through procurement.
   • Series B and beyond → you’ll want Type 2 to compete for larger contracts.
3. How much time do you have?
   • Need a report fast to close a deal? → Type 1 can be a quick win as a show of commitment to a prospect.       Usually accompanied with a timeline to achieving Type 2.
   • Building a scalable compliance posture? → Invest in Type 2.

Common Mistakes to Avoid:

• Jumping straight into Type 2 without preparation. If your controls aren’t mature, you’ll risk audit findings.  Even worse, you might end up with a report you don’t want to release or an adverse opinion.
• Assuming Type 1 will satisfy large financial services companies. It rarely does they want evidence over time.
• Underestimating readiness work. Both types need clean documentation, policies, and role clarity.

Executive Takeaway:

• Type 1 = blueprint → shows you’ve designed the right security framework.
• Type 2 = track record → shows you’ve lived it over time and that the roof didn’t cave in 
• The right choice depends on your client base, growth stage, and deal pipeline.

If your goal is to sell into enterprise or regulated markets, Type 2 is the report that truly opens doors.

🔜 Next in this series: The Hidden Costs of SOC 2 (and How to Budget for Them).