Compliance for Startups: All You Need to Know in 2024

Meeba Gracy

Meeba Gracy

Feb 23, 2024

Compliance for Startups

90% of startups crumble within their first five years. Digging deeper, a recent study reveals that regulatory and legal hurdles rank as the 5th leading causes of startup failures, closely trailing behind the fierce competition in the market. 

To overcome this, you need to consider compliance not as a burdensome chore but rather think of it as a strategic advantage that pushes your startup ahead.

Let’s dive in to know more about compliance for startups!

What is compliance for startups?

Compliance certifications play a vital role in establishing customer trust when it comes to startups. When you obtain these certifications, you show your commitment to meeting industry standards and regulatory requirements. This instills confidence in customers and makes them feel more secure when engaging with small businesses.

Compliance for startups

If you think compliance is solely for corporate giants, you are wrong. In the world of cloud computing where information storage and transfer enable faster response and enhance customer centricity, every business regardless of their size will need to be compliant.

For example, compliance acts as a protective layer for your growing business from potential pitfalls and propels it forward from your competition. While many assume that compliance is a luxury for established enterprises, the truth is that it bestows startups with a competitive edge and prepares them for long-term success.

Why is compliance important for startups?

Startup compliance is important for startups because it is necessary for your growth. Again, Startups, like any other business, are subject to various legal and regulatory obligations. This is where compliance comes in to ensure that you operate within the boundaries of the law and mitigate potential penalties.

Also, many customers want their startup vendors to have a solid security framework before working with them and entrusting their data. On the other hand, if you think you can neglect compliance but still grow, your startup won’t be able to move upmarket at all.

How to choose the right compliance for your startup?

Choosing the right compliance is absolutely necessary because each compliance framework focuses on different considerations.

For example,  if you are a healthcare organization, you must file a HIPAA complaint to deal with the privacy of Protected Health Information (PHI). This is also important because choosing the right compliance will ensure the money, amount of time, and resources you will get to spend. 

Here are the 5 types of compliance for startups you need to know: 


In your startup journey, there will come a moment when SOC 2 audit is a must. Trust us, it’s an audit you won’t want to ignore, especially if your business deals with the data and software (and let’s be honest, that’s almost every startup out there).


Also, achieving SOC 2 compliance means creating a seal of trust for your customers. Imagine proudly displaying the AICPA-approved logo, instantly signaling to enterprise buyers and the world that you’ve recently aced a SOC 1, 2, or 3 audits. The cost for SOC 2 attestation usually ranges from $7000 – $50000

Wondering how much it would cost you to get complaint? Use Sprinto’s cost calculator, designed to give you the closest estimate.    

What exactly does SOC 2 test?

Under SOC 2 audit, your internal controls face scrutiny against five crucial Trust Services criteria: security, availability, confidentiality, privacy, and processing integrity. It mainly demonstrates that your startup has what it takes to safeguard sensitive data and its operations.

If you want to implement SOC 2, define the scope, conduct a gap analysis, conduct risk assessment, implement controls, and undergo the readiness assessment. 

Download the complete SOC 2 checklist

Who needs SOC 2? 

Enterprise buyers often demand SOC 2 compliance from their vendors. This makes the SOC 2 audit vital for ambitious B2B startups eyeing enterprise customers and aiming to climb the market ladder. When you nail it, you position your startup as a trusted partner.

For example, Deloitte witnessed a remarkable 25% surge in SOC 2 engagements between 2017 and 2018 alone. SOC 2 is becoming a must-have badge of honor.

Who conducts it?

The esteemed American Institute of Certified Public Accountants (AICPA) is the trusted authority overseeing and managing the SOC 2 audit process.


PCI DSS is for your startup if you handle customer credit, debit, prepaid, or other payment cards. 


What PCI DSS actually tests?

At its core, the PCI framework evaluates controls for startups dealing with cardholder data, receiving card payments, or storing cardholder information. It’s an examination of the security measures you have in place to protect sensitive payment data. The PCI compliance costs varies according to the size of the organization.

If you want to be PCI compliant, your checklist includes a number of technical and administrative controls like installing a firewall, encrypting cardholder data, and using antivirus software. 

If you want to be PCI compliant, your checklist includes a number of technical and administrative controls like installing a firewall, encrypting cardholder data, and using antivirus software. 

Check the detailed PCI DSS compliance checklist

Who exactly needs PCI DSS compliance? 

PCI DSS compliance is geared towards companies that handle payment cards, including credit cards. Unsurprisingly, startups in the financial technology community engaged in processing payments or storing/handling credit card information find PCI DSS an essential requirement. 

Who oversees and manages this critical compliance standard? 

PCI Security Standards Council is the one that provides the necessary guidelines and best practices to ensure your startup stays on the right path.


If your startup deals with sensitive PHI, you need to be compliant with HIPAA compliance to safeguard patient privacy.


What exactly does the HIPAA framework test? 

HIPAA is designed to protect ePHI. It tests your physical security measures, administrative procedures, and technical safeguards. HIPAA evaluates your startup’s ability to maintain the confidentiality, integrity, and availability of sensitive patient data. HIPAA compliance costs anywhere from $5000 to $50,000 depending on your organization.

Who needs HIPAA compliance?

HIPAA is not just for established healthcare organizations—it’s equally important for startups just stepping into the healthcare industry as well. If your business handles ePHI, whether as a healthcare provider, a health tech startup, or a business associate working with covered entities, HIPAA compliance becomes necessary. 

Download the detailed HIPAA compliance checklist

Who oversees and manages this critical compliance framework? 

HIPAA is managed by the Office for Civil Rights (OCR) within the U.S. Department of Health and Human Services (HHS). They enforce HIPAA regulations.

ISO 27001

If your startup values your information assets’ confidentiality, integrity, and availability, achieving ISO 27001 compliance should be the first step.

ISO 27001

But you don’t need to worry about the manual work involved as there is powerful compliance automation software to rely on. Yes, that’s right, Sprinto is a compliance automation platform that will help you conduct risk assessments and implement security controls in a single dashboard. You will have a bird’s eye view of everything! You can get a demo here!

What exactly does the ISO 27001 framework test? 

ISO 27001 evaluates your startup’s ability to identify, assess, and mitigate information security risks. It establishes a framework for ongoing protection and improvement. The cost of ISO 27001 certification can be anywhere from  $5,000 to $75,000.

Who needs ISO 27001 compliance?

ISO 27001 is not just for large enterprises with more resources; it’s equally necessary for startups that recognize the value of information security. Regardless of your industry, if your business relies on the confidentiality and integrity of information assets, ISO 27001 will instill confidence in your customers and stakeholders.

ISO 27001 certification involves a lot of work and a long checklist. Even after implementing the necessary controls, security teams have the fear of missing out on something. More often than not, the auditor finds gaps in the ISMS. 

You can use this auditor approved, expert compiled checklist to ensure you don’t miss out on any critical activity. 

ISO 27001 certification involves a lot of work and a long checklist. Even after implementing the necessary controls, security teams have the fear of missing out on something. More often than not, the auditor finds gaps in the ISMS. 

You can use this auditor approved, expert compiled checklist to ensure you don’t miss out on any critical activity.

Who oversees the ISO 27001 compliance framework?

ISO 27001 is managed by the International Organization for Standardization (ISO) and the International Electrotechnical Commission (IEC). 

To get GDPR certified, you must demonstrate compliance in ten sections that cover all the requirements of the article such as governance, risk management, princess analysis, and more. 

GDPR (General Data Protection Regulation)

If your startup handles personal data of individuals residing in the European Union, GDPR compliance is paramount to thrive in the global market. The typical cost of GDPR compliance is $10,000.


What exactly does the GDPR framework entail? 

GDPR scrutinizes your adherence to fundamental principles, such as purpose limitation, data minimization, and accountability. It includes various aspects like:

  • Consent Management
  • Data subject rights
  • Data breach notification
  • Cross-border data transfers

Who needs GDPR compliance?

Again, it’s not just for large corporations—it applies to startups that handle the personal data of individuals residing in the EU. Even if one person from Europe visits your website, you must use GDPR compliance. Whether you’re an e-commerce platform, a software-as-a-service provider, or a digital marketing startup doesn’t matter. 

To get GDPR certified, you must demonstrate compliance in ten sections that cover all the requirements of the article such as governance, risk management, princess analysis, and more. 

Who oversees GDPR? 

GDPR is enforced by the Individual data protection authorities (DPAs) from the 27 EU member states to enforce the GDPR.

How to get started with compliance based on your startup?

Getting started on a compliance program requires a deep understanding of which frameworks align with your startup’s unique characteristics. Consider your startup’s size, industry, business model, the nature of your data, and, most importantly, your customers’ needs.

Here are the 3 steps to get started with compliance based on your startup:

1. Choose your compliance type(s) based on the services you provide

Any startups need to look into the specific regulations that relate to their industries. For example, suppose your startup manages customer data in the cloud and processes their credit card payments. In that case, you’ll need to add another compliance framework to your list: PCI DSS because it ensures the secure handling of cardholder data.

If your startup operates in the insurance industry, providing services related to healthcare, you’ll also need to be HIPAA compliant. Remember, compliance extends beyond some sectors—its scope depends on the nature of your services.

And if you plan to do business in Europe or hire European citizens, GDPR compliance becomes crucial. This is because GDPR safeguards individuals’ data privacy rights and applies to startups that handle the personal data of EU residents. 

To give you a broader view, Salesforce complies with SOC 2, HIPAA, GDPR, ISO 27001, PCI DSS, and more. 

How Recruit CRM embraced compliance automation for seamless, multi-framework security audits

Find out how Sprinto is helping companies to get compliant

2. Understanding stage

When you first step into the compliance stage, you’ll soon realize that the legal language could be clearer, leaving you searching for clarity.

For example, a small startup with 6 employees, a simple lock on the office door, and a doorman handling building security might suffice. However, when it comes to an AWS data center, a much more strong security setup is necessary.

Many of the founders who are Sprinto clients often ask us about what is the appropriate level of compliance for their startups. Unfortunately, the answer tends to be, “It depends.” This is why our customer experience experts help them navigate this complexity; founders can start by considering what aligns best with their current growth stage.

Moreover, Forbes highlighted earlier this year that the security needs of your infrastructure would evolve as your startup matures. 

  • At the pre-seed stage, stage-appropriate compliance might involve implementing database backups and basic encryption measures. 
  • As you progress towards Series A funding and expand your team with a dozen engineers, replacing shared accounts with individual accounts with strict permissions becomes crucial. 
  • Investing in a security information and event management (SIEM) tool is suggested when you secure Series A funding.

Therefore, you need first to understand your startup’s unique needs at each stage and tailor your compliance efforts. 

Therefore, you must first understand your startup’s unique needs at each stage and tailor your compliance efforts. 

3. Engage with a compliance automation firm

Third-party compliance automation platforms like Sprinto have expertise spanning SOC 2, ISO 27001, and HIPAA standards. We empower startups like yours to navigate the compliance landscape with ease.

Imagine a dashboard that automates your compliance process with unique features that simplify your journey. With Sprinto, you can embark on a pre-assessment that swiftly identifies gaps in your compliance program. 

You can map your existing practices against the desired criteria, such as SOC 2, and get info into areas that require critical attention. Sprinto’s integration capabilities span a wide range of systems, helping you create a well thought out compliance workflow that takes minutes to set up.

Also check out: What is compliance workflow and how to implement

Implement compliance the faster, more efficient way

With Sprinto, you can set up and run a compliance program of your choice in three easy steps. 

  1. Connect – to understand the unique challenges of your business and the compliance requirements, our experts speak to you. This helps to decide the right fit – the specific compliance module(s).
  2. Implement – we implement the controls of the selected framework(s). A person from your organization with access to all systems will communicate with our team to start policy acknowledgment, run vulnerability checks, set up controls, and document evidence. These processes are fully automated. 
  3. Continuous compliance – ensure compliance through timely alerts, checks, and stay on top of checks. Your involvement is required to address failing checks. 
  4. Audit – we face the auditors and answer security questions for you. You can communicate with the auditors from an auditor friendly dashboard if needed. 

How Sprinto helped Kodif step up towards enterprise-readiness with compliance

Recently, we helped Phyllo get their SOC 2 attestation, and they are also on the way to get ISO 27001 certified. You can read the case study here!

What sets Sprinto apart is our commitment to data security and privacy. We prioritize the confidentiality of your information by employing a “read-only audit” permission model. This means that while Sprinto has access to the configuration information of your systems, it does not have access to the underlying data, ensuring the utmost protection for your sensitive information.

So, what are you waiting for? Let’s get started with a demo!


What is a compliance risk for startups?

Compliance risk for startups refers to the potential danger of non-compliance with industry regulations or laws. This risk is particularly significant for startups as they often need to be made aware of the specific requirements and regulations applicable to their industry.

What is a compliance automation platform?

A compliance automation platform is a technology-driven solution that utilizes artificial intelligence to monitor systems for compliance. When you replace manual processes, these platforms consolidate all compliance procedures into a centralized location for easy management.

What are some benefits of maintaining compliance?

Maintaining compliance offers several benefits:

  • Enhanced customer trust
  • A culture of compliance
  • Cleaner data
  • Improved efficiency and scalability
Meeba Gracy

Meeba Gracy

Meeba, an ISC2-certified cybersecurity specialist, passionately decodes and delivers impactful content on compliance and complex digital security matters. Adept at transforming intricate concepts into accessible insights, she’s committed to enlightening readers. Off the clock, she can be found with her nose in the latest thriller novel or exploring new haunts in the city.

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