The paper aims to define which type of intellectual property (IP) reward regime increases the competitiveness of innovative SMEs. The authors analyse IP reward regimes and their impact on new knowledge and technology creation by SME, its IP, market, business model and other strategic issues related to collaboration of inventor, entrepreneur and investor. Two case studies and interviews have been used to map the main factors affecting IP and market strategies of biotech and electronic SMEs. The main conclusion is that IP reward regime has to be flexible and based rather on contractual arrangements than on rigid imperative legal norms.