Technology companies excited at the prospect of sharing in a new £440m fund have been warned to temper their enthusiasm.
Commercial specialists at Shoosmiths say red tape could make the Technology Strategy Board cash hard to get hold of.
Michelle Sherwood, partner and head of the national law firm's IT team, said: "While I welcome the announcement of a large kitty like this, the sort of companies it's aimed at might struggle to share in it.
"I've seen it happen before: small and medium-sized businesses (SMEs) quite rightly get excited at the prospect of new funding, then are disappointed when they find out how much legislation there is to grapple with, just to get their business up and running.
"This is particularly so in the technology sector, where there are so many areas of law which can have an impact and where, quite often, the legislation is playing 'catch-up' with the technology.
"Frustrated, they abandon their attempts and go elsewhere."
TheTechnology Strategy Board says its £440m 'war chest' is aimed at funding 'innovative businesses' in sectors such as advanced materials, satellites, digital technologies and healthcare.
It wants more than 60% of the money to go to SMEs.
"The problem is," says Sherwood, "these are the very businesses that find it most difficult to grapple with the bureaucratic hurdles and legislative demands placed en route to the funding.
"Either they don't know where to turn for help in overcoming those hurdles, or they simply can't afford the necessary advice that would enable them access to the cash.
"We're finding that we have to find more and more innovative ways to help SMEs manage their tight budgets and to help them find an easy way through the various regulations.
"And because they're often fast-moving companies in rapidly developing sectors, they're unable to wait around and so move on. However, SMEs provided with the right support can flourish and may turn out to be the Apple, Microsoft or Facebook of the future."