You could have given more information about yourself. Why have you raised this query? Are you student or professional? Are you going to start new company?
Start up or otherwise, people challenges are overall same. Whenever group of persons work together there is bound to be difference of opinion or even conflict. In start up, the issues are sorted out easily and promptly as the MD is accessible. In contrast, in bigger companies MD is unapproachable and he gets filtered information from the persons working around him. In bigger companies, I have seen MDs living in their own imaginary world. For start ups, owner's feet are on the ground till the time they do not take off.
Secondly, in the well-established companies, some systems and processes are stabilised. By committing mistakes over a period of time, some organisational learning is there. This could be missing in start ups.
Next is about getting people. It is little easy for older companies as some brand pull is there. In contrast, not necessarily start ups will be able attract talent and they have to settle for mediocre people. This very mediocrity shapes the culture of the company and possibly becomes reason for their doom.
7th April 2015 From India, Bangalore
Sorry my bad... I'm a professional working for a Mid size IT services company head quartered in Bangalore, we are planning to get into product space and hence we are starting a new division with in the organization but we don't want to club it under the services banner as there will conflict of interest with the customers. This new division is what we want run as a separate start-up unit.
10th April 2015 From India, Bangalore