Small-cap refers to companies with a relatively small market capitalization, generally ranging from $300 million to $2 billion. These firms are often in earlier stages of growth and may operate in niche markets or emerging industries. While small-cap stocks can offer significant upside potential, they also tend to be more volatile and carry higher risk compared to large-cap companies. Investors often track small-cap indexes, such as the Russell 2000, to gauge performance in this segment.