Small cap represents stocks of companies with a market capitalization between $500 million and $2 billion as per global standards. These are no precise limits as different brokerages, funds, and analysts may define small-cap stock in slightly different ways. Investors may perceive a small-cap stock as having greater growth potential than a large-cap stock. A small-cap stock often has a lower level of institutional interest as many funds have limits on the percentage of a company they may own.