The article aims to assess the current state of the financial policies for small- and medium-sized enterprises (SMEs) of innovation in Vietnam and thereby proposes policy recommendations to promote investment in innovation. The authors used mainly qualitative methods and reviewed secondary documents to systematically evaluate the current major groups of financial support policies for innovation. The findings show that the existing framework has not been designed for the specific characteristics of businesses of innovation, especially regarding their high risk and little collateral natures. This has caused inconsistency and inefficiencies in the policy system, which is supposed to create strong motivations for activities of innovation in Vietnam, during the past periods. Therefore, it is necessary to supplement, amend, and complete the legal system for innovation, especially to formulate and promulgate a separate Law for Venture Capital. In addition, stipulations on the state's investment in innovation need to be further made in accordance with the principles of not focusing on profitability, of consistency, expansion and inclusiveness.