It's certainly possible, more so in the early days, but it's relatively rare that you see a successful company continue to have people with only a year or two professional experience making hiring decisions. If those people have solid backgrounds that approach isn't necessarily disastrous but it'll be limited - e.g. a fresh CS major doing a startup will probably hire people who can create working code, but they're probably going to over-value certain academic characteristics over practical engineering and miss solid candidates or (worse) expose the company to liability. Inexperience can also just lead to things like hiring people who seem like they're someone you'd want to hang out with.
Note also that I would draw a distinction between 1-2 years of total experience and, say, someone transitioning from academia to industry. Someone who was, say, a successful grad student likely also accumulated a fair amount of other life experience that a 22 year old is unlikely to have.