For companies needing a significant cash injection but not ready for an IPO, Regulation A+ may be an attractive choice.

Thanks to a 2015 update in the law as part of the JOBS Act, Reg A+ has become more and more appealing to companies. Prior to the update, Reg A capped raises at $5m; now Reg A+ caps them at $50m. Offerings are structured like a “mini-IPO”, where companies file with the SEC and get approval to offer shares to the general public, but the fees are smaller and the ongoing disclosure is less involved, putting it in reach of small and still-growing companies.

The most revolutionary aspect of Reg A+ is that investing via this method is now open to everyone, and companies can publicly advertise their rounds to attract investors. Traditionally, only accredited investors (i.e., the wealthiest) could invest in startups and early-stage companies, so this is a big change. With Reg A+, investing is much more democratic.

The implications of this democratization go deep. For years now, the market has been able to use crowdfunding on platforms like Kickstarter and Indiegogo to bring products to market or to fund projects that “the crowd” believes in. Individuals and brands with existing fan bases often easily raise large amounts of money by basically pre-selling the final result, be it a web series or a cool pair of headphones, via rewards. (Of course, it’s not quite the same as pre-selling, since the rewards are not guaranteed, but it’s functionally similar.) That idea can now be applied to investing. Since anyone can invest, “the crowd” can choose to fund companies with products or missions that speak to people. This increases the opportunity for individuals to get in on early-stage companies that could turn out to be lucrative investments, and it offers the potential to bring increased diversity to the investment (and business) world.

Businesses and entrepreneurs considering a Reg A+ raise have two options: Tier 1 or Tier 2. Tier 1 allows you to raise a max of $20 million. It is subject to Blue Sky regulations in the states where your investors live, but you do not have to provide an annual audit and financial reports. Tier 2 allows you to raise a max of $50 million, and it is exempt from state Blue Sky regulations, but you must provide annual audited financials. Both tiers are open to both accredited and non-accredited investors, although there are limits to the amount of money that non-accredited investors can invest.

Reg A+ is not the best choice for all businesses. It isn’t the cheapest method of raising capital, since it requires SEC approval beyond simply Form D (which is all that’s required for traditional Regulation D offerings). However, in the right situation, it’s a powerful tool.

Want additional details on the differences between Reg A+ and other types of raises? Click here for a comparison put together by CrowdCheck, a firm that provides due diligence, disclosure, and compliance for online capital raises.