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Definitions of Small Companies, Microcaps and Nanocaps

Size Definitions:

What size is “small”? There are many definitions. Some people define a small public company as one with a market cap under $1 billion. Others define small cap as under $2 billion. And there are yet other definitions. Over the last two decades the word “small” has come to mean larger and larger companies! To confuse matters, NASDAQ’s small cap market system continues to list truly small public companies, many of which would be classified as nano-cap by the definitions, below. Here are some current definitions from Investopedia and Investor Words.

Market Cap Investopedia Investor Words
Mega-Cap over $200 billion over $250 billion
Large-Cap $10 billion – $200 billion. $5 billion – $250 billion
Mid-Cap $2 billion – $10 billion $1 billion – $5 billion
Small-Cap $300 million – $2 billion $250 million – $1 billion
Micro-Cap $50 million – $300 million under 250 million
Nano-Cap under $50 million

Our practical definition is as follows: Once a company trades for $10 per share or more and trades on NASDAQ’s 2 higher tiers, AME, NYSE or OTCQX we do not call it a small company. Within our limited definition of “small companies” there still remain very large differences relevant to investing.