There is limited experience with innovation policies in rural areas, often based on a one-size-fits-all approach. However, rural businesses have diverse needs and there is difficulty in applying smart specialisation approaches for the use of European Union Cohesion funding in rural areas. A key resource in rural areas is the local university, and universities face increased demands to support local firms. This paper examines one particular case of a university in a rural region and its use of the European Regional Development Fund to support innovation activities. The challenges of working with rural businesses are explored, as is the focus on one-to-one support rather than the more collective smart specialisation approach. Universities need to take a pragmatic approach to ensure that the needs of firms can be balanced with the capacities of rural universities which are often smaller and more specialised than urban universities.