That's kind of true, but you should probably ignore it for purposes of salary negotiation. It's not really that different from a bigger company in most cases- they have a budget in mind, and you can probably negotiate up to the limit of the budget. This will sometimes be a hard limit btw - e.g. if it's a Dev shop, they often know how much they're getting paid for a particular project, and can calculate the maximum salary they can profitably pay.

Smaller companies are often more flexible on other terms though, which is worth knowing. Often they can give you eg work from home options, different configuration of vacation days, etc. This if useful to think any for negotiation purposes.