This chapter discusses knowledge management (KM) aspects of how software process and software process improvement (SPI) is practiced within very small entities (VSEs) in the context of Irish software development industry. In particular, this study is concerned with the process of software development knowledge management in supporting the SPI. In order to understand the support process, the authors of this chapter have studied how KM processes are practiced within VSEs which includes communica- tion, learning, sharing, and documentation process. This study also focuses in detail on the issues of the knowledge atrophy problem in VSEs. The findings explain how KM has been practiced and influenced the software development process and process improvement in VSEs. This result indicates that KM processes in VSEs are being undertaken in a very informal manner and also in indirect way. This is due to a small team size, autonomous working and macro-management style and caused VSEs to be more informal in their KM processes specifically and SPI generally. In addition, the results have indicated that the informal environment and culture helped VSEs to easily create and share knowledge between staff members and also assisted VSEs to mitigate the knowledge atrophy problem in their organization.