October 13, 2026
Yes. If your startup collects anything from users, even an email address for a waitlist, you need a privacy policy, and it has to describe what you actually do. California law requires one for essentially every commercial website or app used by Californians, the app stores require one, and the state privacy laws, COPPA and GDPR dictate much of what it must say. A good policy states what you collect, why, who you share it with (including analytics, ad pixels and AI vendors), how long you keep it, and how people exercise their rights.
Key takeaways
California’s Online Privacy Protection Act (CalOPPA) requires any commercial website or online service that collects personal information from California residents to post a privacy policy. Because nearly every US product has California users, that rule effectively covers every US startup. Delaware has a similar law, and Rhode Island’s privacy law, in force since January 2026, requires commercial websites to post a privacy notice regardless of the company’s size.
Apple’s App Store and Google Play both require a privacy policy link for any app that collects user data, and most payment processors, ad platforms and enterprise customers ask for one too.
Beyond requiring a policy, about 20 state comprehensive privacy laws prescribe what it must say once your startup crosses their size thresholds, with more states, including Alabama, Louisiana, Oklahoma and Vermont, taking effect in 2027 and 2028. If you offer your product to people in the EU or UK, GDPR requires specific disclosures from day one. See US Data Privacy Laws and GDPR Basics.
Most startup privacy policies cover the same core sections:
Write the policy as a description of your product, not a copy of someone else’s. A policy that promises things you don’t do is the most common way startups get into trouble. See Can’t My Startup Just Copy Someone Else’s Terms of Service and Privacy Policy?
Sharing is the first. Founders tend to list “service providers” and stop, but if you run Meta or Google ad pixels, many state laws treat that as a sale or sharing of personal information for targeted advertising. If those laws apply to you, you need a “Do Not Sell or Share My Personal Information” link and must honor browser opt-out signals like Global Privacy Control, which most of the newer state laws require.
Retention is the second. California requires you to state how long you keep each category of personal information, and other laws expect you to delete data once you no longer need it. Pick periods you can actually follow, and build deletion into the product.
Rights is the third. Covered businesses must explain how to submit a request, how they verify identity, how long they take to respond, and how a user can appeal a denial. Even if you’re below the state thresholds, give users a working way to delete their account and data. Users, app stores and enterprise customers expect it.
List the categories of cookies, pixels and SDKs you use (essential, analytics, advertising) and the main third parties behind them, and explain how users can opt out. If you use a cookie preferences tool, link to it from the policy.
For US users, the rule is generally notice and opt-out. For visitors in the EU and UK, you need opt-in consent before setting non-essential cookies, which is why sites with European traffic show a consent banner. If you don’t market to Europe and have little European traffic, many startups skip the banner, but turn it on once that changes.
If you send user data to an AI model provider, say so. Disclose the categories of AI vendors you use as service providers, what data goes to them, and whether those vendors may retain it.
Then answer the question users and enterprise customers ask first: do you use their data or content to train AI models, yours or anyone else’s? State the answer plainly. If you do, explain how to opt out. If you don’t, make sure your vendor contracts say the vendor doesn’t either. If you use automated decision-making that significantly affects people, such as decisions about credit, housing, employment or access to services, California and several other states now require additional notice and, in some cases, an opt-out.
If your service is directed to children under 13, or you know you’re collecting data from children under 13, COPPA applies. The FTC’s amended COPPA rule, with compliance required since April 2026, requires a notice that identifies the third parties receiving children’s data, a written data retention policy, a written security program, and separate parental consent before disclosing children’s data to third parties for purposes like advertising. Several states add protections for teens, often up to 16 or 18, especially around targeted advertising and selling data.
If your product isn’t meant for children, say so in the policy, set a minimum age in your terms, and delete data you learn came from a child.
Founders often assume anonymized data falls outside the privacy laws. It does only if it meets the legal standard. Under the California law, de-identified data must not reasonably be linkable to a person, and you must publicly commit not to re-identify it and contractually bind anyone you share it with. Health data has its own HIPAA de-identification standards. Under GDPR, pseudonymized data (for example, a user ID in place of a name) is still personal data. If your policy says you share “anonymized” data, make sure it actually is.
Yes. Even a product built on end-to-end encryption or zero data retention still collects account, billing, support and analytics data, and the policy must cover that. Describe your encryption architecture accurately. Don’t claim “we never see your data” unless that’s true for every part of the product, including logs, backups, crash reports and the AI vendors you call. Overclaiming is exactly the kind of statement the FTC treats as deceptive.
Yes. For privacy purposes, a beta is a launch. Publish the policy before you invite users, collect the minimum you need to test, and put beta testers under short beta terms that cover feedback and confidentiality.
Post the new version with a new effective date, keep every prior version, and notify users of material changes by email or in the product. If you rebrand or change your company name, update the policy to name the right entity.
A notice is enough for most updates. But if you want to use data you already collected in a materially different way, such as sharing it with new partners or training AI models on it, get users’ affirmative consent first. The FTC has treated retroactive changes made by notice alone as unfair or deceptive.
The privacy policy is a notice to individuals. It doesn’t govern your relationship with business customers whose data you process. Those customers will expect a data processing agreement and a contract term on what happens to their data when the relationship ends, usually deletion or return within a set period after termination. Keep the privacy policy, your terms of service and your customer contracts consistent with each other. See How to Draft Terms of Service for Startups.
For more, see US Data Privacy Laws, GDPR Basics, Startup Best Practices for Data Privacy and Data Breach: The Risks for Early Stage Startups. If you’d like help drafting your privacy policy and terms, see our Terms of Service & Privacy Policy service or contact us.
