A small cap is a company whose market capitalization is small.
Even if a mutual fund or an institutional investor finds a good small cap stock, it wont be able buy it because of many market restrictions like non availability of large number of shares or regulatory ristrictions like buying more than a % of companies equity etc.
Since the market capitalization is small, any good news will make the company price surge fast. Any bad news will have a slow effect as the sellers are limited.
