Here is another perspective on the problem, using some big guns (Gabriel-Ulmer duality).

Given a small category $C$, let $K$ be its free finite cocompletion. This means $K^{op}$ is the free finite completion of $C^{op}$, which means in turn that for any functor $F: C^{op} \to \mathbf{Set}$, there is a finitely continuous (or left exact) functor $\tilde{F}: K^{op} \to \mathbf{Set}$ that extends $F$ along the canonical inclusion $i: C^{op} \to K^{op}$, and this extension is unique up to unique isomorphism. Put differently, restriction along $i$ induces an equivalence

$$\mathrm{Lex}(K^{op}, \mathbf{Set}) \to \mathrm{Cat}(C^{op}, \mathbf{Set}).$$

In particular, the presheaf category $\mathrm{Cat}(C^{op}, \mathbf{Set})$ is locally finitely presentable. By the way, it's well known that the free finite cocompletion $K$ of a small category $C$ is simply the category of finite colimits of representables: see section 5.9 of Kelly's Basic Concepts of Enriched Category Theory.

On the other hand, Gabriel-Ulmer duality assures us that given a locally finitely presentable category $A$, there is up to equivalence only one finitely complete category $L$ for which $A \simeq \mathrm{Lex}(L, \mathbf{Set})$. Even better, Gabriel-Ulmer duality gives a recipe for obtaining $L$: it is the dual of the category of compact objects in $A$, meaning objects $a$ such that $A(a, -): A \to \mathbf{Set}$ preserves filtered colimits.

Putting all this together, this shows that the category of compact objects in the category of presheaves over $C$ is equivalent to the free finite cocompletion of $C$, or to the category of finite colimits of representable presheaves.