"Weakness is strength. Strength is weakness."
Being a small flexible company means they can't compete on money, but they can compete on flexibility and increasing quality of life.
I think that's all any employee wants from a job -- a good quality of life. Money is probably the worst way of quantifying if they employee is already middle class.
It's amazing even how "here's a week to fix that low priority problem that bugs the shit out of you" would go to improve morale.