We have a relative who suffered through all of elementary school due to being in a small school with only one class per grade and having an issue with one of the girls in her class. OTOH, all of my three children have attended an even smaller private school now for several years and they've absolutely thrived academically and socially - even when there were issues with classmates. So much depends on both the actual kids in the class and on how teachers handle social issues when it's a small school.
I also wouldn't worry about lack of reputation/history - I'd go more on gut feeling of how well the school is run, teachers willingness to work with parents, how teachers treat the children, curriculum etc than history. After all, even the absolutely greatest of schools had to start with a "year 1" and no history. If you try it out and find you like the school, there can be something very exciting about being a part of making that history!
Good luck with your decision!
polarbear
