"Small-cap" refers to companies with a relatively small market capitalization, typically between $300 million and $2 billion. These companies are often in the early stages of growth and can offer significant potential for investors seeking higher returns. However, they may also come with increased risks due to their size and market volatility. Investing in small-cap stocks can provide diversification in a portfolio, as they often behave differently than larger companies. Many small-cap firms are in emerging industries or niche markets, which can lead to rapid growth. However, investors should be aware of the potential for greater price fluctuations compared to larger, more established companies like large-cap firms.