Sometimes small firms are just stupid/incompetent. They overestimate their own value and how 'cool' they are.
I once interviewed at a small hedge fund for an [unpaid] internship where the idiots interviewing me asked those inane brainteasers (e.g. how many ping-pong balls do you need to fill a 747?) and unnecessarily detailed questions (e.g. what's the S&P at this morning?). Then, even though I told them it was finals week, they gave me a fairly intensive HOMEWORK assignment due in two days. The next morning I emailed them and said I was withdrawing myself from consideration.
Note that at the same time I was interviewing at top I-banks and investment firms, and they actually treated me with respect and asked intelligent questions in the interviews.