Aside from everyone else's input, I would also like to add that smaller companies usually come with the added benefit of adaptability, quick iterations/improvements, and clients' have direct access to the key decision maker which are all great points sought after by customers. It's classic interview 101: turn a seeming weakness into a strength.
As long as you have a long term vision of where you want to take the company (plan for the next quarter, next semester, one year plan, pipeline of possible improvements, potential pipeline of clients, hiring plan of who and when if necessary, etc.), and can communicate this in a reassuring way without puffery you can come across as trustworthy and even respectable to do business with. Customers just want to know you are the best value option within the category/niche. Part of being the best option is the reassurance that you:
1. have a product that meets their needs (product-market fit)
2. have long-term potential (so they don't have to worry about you shutting down and them wasting time looking for another alternative) You can answer with the truth and then redirect that question back at them and ask things like:
- what do you look for specifically in a company?
- Does the number of employees affect the metrics you are trying to achieve or need help with?
(the answers you get will give you a better idea of how to adapt your pitch based on their priorities, metrics, & expectations)
In the end, if they aren't happy with the truth, you get out of this all the wiser and still win. Good luck!