stock with a small capitalization, or total equity value. Capitalization is calculated by multiplying a stock's share price by the number of outstanding shares. A small-cap company generally has a market cap of less than $500 million. Investing in small-cap stocks generally entails greater risks than investing in stocks with larger capitalizations.
A stock with a small level of capitalization, usually less than $500 million in market value (market value = price per share multiplied by number of shares outstanding). See also large-cap and medium-cap.
An abbreviation for small market capitalization. Founders generally considers small-cap stocks to have market capitalizations of less than $2.5 billion for domestic securities and $1.5 billion for foreign securities.