The big-name stocks haven't always been big. They had to start somewhere, and sometimes a new company can become very successful very quickly and in those instances you can profit considerably. Yes the fortune 500's are important, because everyone is watching and trading them. But, a good company can start small, and rise in value just like anyone else.
If a company is smaller, it likely has a lower budget for quality material. Someone should do their research or just buy a product from a more known or larger brand if they do not wish to do much research. It's best to get better goods for your money and hopefully that's what a larger company will offer.
I think all companies whether big or small should factor in to your decision. I think there is a lot of small companies that have a lot of potential and could make a big return. Just because a company is small you should not look the other way, you should see which one you believe will get you the most in the long run.
Some small cap stocks should always factor into any investment decision. They are a crucial part of a diversified portfolio. I am firmly against, however, a large portion of small cap stocks in a portfolio. They should be about 10 percent of the whole pie and nothing more unless the portfolio is very large.