"Small-cap" refers to companies with a relatively small market capitalization, typically defined as having a market value 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 be appealing for those looking to diversify their portfolios. While they may not have the stability of larger companies, small-cap stocks can provide opportunities for substantial growth as they expand and capture market share. Investors should carefully consider their risk tolerance when exploring this segment of the market.