For a start-up, subsidy can make the difference; it can enable the start of an innovation quest or serve as a lifeline that saves the idea from going down. Subsidy is an important supporter in the innovation arena, but certain subsidies can have unintended problematic side effects that should be recognized and considered when applying for the subsidy. The degree of drawback depends on the type of subsidy; in general, the more generic the subsidy, the less the disadvantages. The three main disadvantages are:
1. The costs in time and money for submitting and reporting can be considerable, certainly for a small start-up company.
2. It can enable an innovation that has no sound business plan to stay alive too long and ...