How Startups Can Win the Fortune 500

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Acquiring a Fortune 500 client can change the course of a new company's development. Whether they are participating in a pilot program or purchasing as a customer, accessing these large corporations can lead to future growth opportunities. However, there is an obstacle hindering progress: adherence.

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Fortune 500 companies face risks when collaborating with startups, particularly those in the early stages. A data breach or failure to comply can permanently harm their reputation, let alone their financial situation. Consequently, these businesses enforce stringent acquisition procedures and security demands on their suppliers and allies. Although this can benefit businesses, it poses a challenge for startups lacking a specific security or compliance department (i.e. the majority of startups).

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Compliance Unlocks the Enterprise

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Compliance involves following specific rules or standards set by authorities or industry norms. These guidelines make sure that businesses are adhering to top standards, especially regarding data protection, confidentiality, and operational reliability. When trying to partner with Fortune 500 companies, startups must prioritize compliance in IT and security.

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Companies that do not prioritize security are not an option for enterprises due to cost constraints. Any violation may result in significant monetary and reputational damages. This is why the Fortune 500 companies require startups to adhere to recognized security frameworks before they will consider meeting with your team.

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The Most Popular Compliance Frameworks

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There may be numerous enterprise compliance frameworks available, but only one or two are necessary to begin succeeding in the enterprise.

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1. SOC 2 was created by the AICPA and centers on companies' handling of customer data through five "trust service criteria": security, availability, processing integrity, confidentiality, and privacy. SOC 2 compliance has become a requirement for companies that manage customer data and is especially favored by software-as-a-service (SaaS) businesses. In the last five years, there has been a significant increase in the adoption of SOC 2. Currently, more than 75% of Fortune 500 companies request SOC 2 reports prior to working with a new vendor.

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2. ISO 27001 is a global standard that offers guidelines for creating, executing, and sustaining an ISMS. It is a broad framework that applies to various industries.

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3. HIPAA compliance is essential for healthcare and biotech companies and cannot be overlooked. This structure guarantees that entities safeguard patient information and adhere to privacy rules.

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4. PCI DSS is crucial for those in financial services or who process credit card payments. This system guarantees safe management of credit card details to avoid fraud and security breaches.

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SOC 2: The Fortune 500 Standard

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Fortune 500 companies prioritize a company's SOC 2 certification as their main concern. Obtaining a SOC 2 certification can seem intimidating for startups.

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There are two categories of SOC 2 certifications known as Type I and Type II.

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• SOC 2 Type I assesses the configuration of your security measures at a particular moment. It represents your systems and policies at the time of the audit.

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• SOC 2 Type II evaluates the efficiency of security controls over a timeframe, usually spanning six months to a year. Type II is frequently preferred by enterprise clients because it proves that a company's security protocols are effective in real-world situations, not just in theory.

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However, there is a way to get around it. Even though SOC 2 Type II is frequently needed, many new businesses can secure a Fortune 500 deal by beginning with a SOC 2 Type I examination. Teams can typically give themselves more time to finalize the deal by demonstrating progress towards SOC 2 Type II compliance and presenting a letter from their auditor confirming they are on track, even before finishing the 6-12 month audit.

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Managing the Compliance Timeline

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Although it would be best for a startup to have achieved their SOC 2 Type I certification before targeting the Fortune 500, it is not always feasible. Your team can still go after Fortune 500 deals even if you haven't accomplished this yet. Here is the method:

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Discuss and agree upon compliance goals: It is important to understand that not every Fortune 500 client will require complete compliance immediately. Being open and clear about your compliance plan and willing to make changes can lead many businesses to be accommodating with your schedule, especially if you demonstrate a strong dedication to security.

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Utilize automation for compliance: Utilizing platforms for managing SOC 2 compliance can save precious time. These tools assist in monitoring your progress and anticipate contractual needs, helping you be better equipped for upcoming audits and negotiations.

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Final Thoughts

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Obtaining compliance certifications is essential for securing contracts with Fortune 500 companies. SOC 2 compliance in the United States is now seen as the highest standard. By utilizing compliance automation tools, bargaining terms when feasible, and prioritizing your security roadmap, startups can set themselves up to secure enterprise contracts without having to give up all of their assets.

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Make sure that when you register for a compliance platform, it can assist in both compliance procedures and forecasting and negotiating contractual needs. This comprehensive strategy will provide you with the advantage necessary to attract Fortune 500 clients, all while ensuring that your innovation process continues without disruption.

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Koop’s customer assurance platform helps tech companies seamlessly navigate the complexities of business insurance, regulatory compliance, and security automation in one place.

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‍We provide a comprehensive suite of insurance coverage that includes General Liability, Technology Errors & Omissions, Cyber Liability, and Management Liability coupled with the most cost-effective SOC 2 compliance certification on the market.

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‍Ready to learn more? Visit our website at https://www.koop.ai or drop us a note at hello@koop.ai.