'undercapitalize' originates from the prefix 'under-' meaning 'below' or 'insufficient' and the word 'capitalize,' which comes from the Latin 'capitalis,' meaning 'of the head' or 'chief.'

'undercapitalize' changed from the concept of 'insufficient capital' in business contexts and eventually became the modern English word 'undercapitalize.'

Initially, it meant 'to provide insufficient capital,' and this meaning has largely remained the same in modern usage.