In today’s cybersecurity landscape, compliance is no longer something companies can afford to postpone. For startups—particularly those in fintech, health tech, and other regulated industries—compliance has become a prerequisite for growth, trust, and credibility.
In a recent episode of the Crushing It podcast, Jonathan Trimble sat down with Kate Williams, a partner in the risk assurance and advisory practice at Maxwell Lock and Ritter, to unpack what founders and executives need to understand about compliance, SOC 2, and the growing impact of AI on cybersecurity risk.
What emerged from the conversation was a clear message: the companies that scale successfully are the ones that treat compliance as a strategic capability—not a last-minute hurdle.
One of the most notable trends Kate highlighted is how early compliance requirements are now appearing in the startup lifecycle. In the past, startups often waited until they were larger or more mature before engaging in formal compliance efforts. Today, that timeline has shifted dramatically.
Many startups are being asked for a SOC 2 report as part of landing a significant customer—sometimes long before they would otherwise consider a financial audit or other formal assurance work. Enterprise customers, particularly in regulated sectors, are increasingly unwilling to take on third-party risk without documented controls in place.
The result is a new reality: compliance is no longer just about regulation—it’s about earning trust.
A common question Kate hears from founders is, “When should we start the compliance process?” Her answer is practical and experience-driven.
There is often a pivotal moment when a startup begins courting a meaningful client or partner. That is the moment to start thinking seriously about compliance—not when a contract deadline is already looming.
Rather than rushing straight into an audit, Kate recommends starting with a readiness process. Readiness allows companies to:
Understand what controls are expected
Identify gaps in documentation and process
Build evidence deliberately instead of reactively
This proactive approach reduces stress, cost, and risk. More importantly, it prevents the all-too-common scenario where teams scramble to meet unrealistic deadlines because compliance was triggered by a last-minute contractual requirement.
Kate also broke down one of the most common areas of confusion for growing companies: the difference between SOC 2 Type 1 and SOC 2 Type 2 reports.
SOC 2 Type 1 evaluates whether a company’s controls are designed appropriately at a specific point in time.
SOC 2 Type 2 assesses how effectively those controls operate over an extended period.
For many startups, a Type 1 report is a logical and valuable first step. It introduces the compliance process, clarifies expectations, and helps teams understand what evidence they’ll need to sustain controls over time.
Importantly, Kate emphasized that SOC 2 should not be viewed as a one-time exercise. It’s a maturity journey—one that aligns closely with how a company builds operational discipline as it scales.
One of the most telling moments in the conversation came when Kate described how compliance pressure often arises not from regulation itself, but from contract language.
In one example, a company discovered—far too late—that an amendment to a contract introduced new compliance requirements. What followed was a frantic rush to complete work that could have been planned months earlier.
This is a common pattern. Compliance rarely becomes urgent because a founder planned for it. It becomes urgent because a customer demanded it.
The lesson is clear: organizations need strong internal communication and a solid understanding of contractual obligations. Compliance, legal, security, and business teams must be aligned long before agreements are signed.
As AI adoption accelerates, compliance expectations are evolving right alongside it. Kate noted that while AI can dramatically improve efficiency, it also introduces new categories of risk that many organizations are not yet prepared to manage.
Regulatory frameworks are still catching up, but companies cannot afford to wait. Existing standards already expect organizations to:
Understand how data is used and protected
Manage third-party and vendor risk
Maintain accountability for automated decision-making
AI doesn’t eliminate these responsibilities—it amplifies them.
One of the most pressing concerns Kate raised is the rise of shadow AI—the use of unauthorized AI tools by employees seeking convenience or speed.
This issue is especially dangerous in sectors like healthcare and financial services, where sensitive data is involved. Without clear policies, approved tools, and user education, organizations risk exposing data and undermining their compliance posture.
Kate stressed the importance of establishing guardrails early:
Define what AI tools are approved
Communicate acceptable use clearly
Incorporate AI risk into existing compliance and security frameworks
Ignoring shadow AI doesn’t make it go away—it simply increases exposure.
The conversation with Kate Williams underscores several critical lessons for leaders:
Compliance is a growth enabler, not a bureaucratic burden
Starting early reduces risk, cost, and disruption
SOC 2 is a journey, not a checkbox
AI introduces new compliance challenges that require proactive governance
Trust—with customers, partners, and regulators—is built through discipline
As the cybersecurity and regulatory landscape continues to evolve, the organizations that thrive will be those that treat compliance as part of their foundation, not an afterthought.
You can listen to the full conversation with Kate Williams on the Crushing It podcast, where we dive deeper into compliance strategy, real-world examples, and what it truly takes to scale responsibly in today’s risk environment.