Small-cap stocks are generally companies with market caps between $300 million and $2 billion -- which may not seem that small, but when you think about the number of companies worth hundreds of billions (and even trillions), you see why these companies are considered the small players in the stock market.

With a smaller size comes much more room for growth within both a business and its stock price. That's what makes them so potentially lucrative for investors. You won't see many blue-chip stocks doubling their value in one year, but the right small-cap growth stock could provide exponential returns.

After all, the fourth-largest public U.S. company (as of August 16), Amazon (NASDAQ: AMZN), was once a small-cap stock. Needless to say, it's not anymore, and I'm sure a lot of people are retiring early thanks to investing in it throughout the years.

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Source Fool.com