An important aim of many rural development measures is to stimulate the generation of employment in lagging rural areas. The Swedish membership in the EU in 1995 opened up the possibility to support rural development with the Structural Funds. This report addresses the underlying factors determining the success or failure of project support from the EU Structural Funds. The focus is on project support in EU Objective 5b areas in Sweden during the period 1995-1999. Further, the study concentrates on project support with the explicit intention to create new employment in the area. In this context, “success” means that some kind of employment related to the project remained after the project disbursement ended, while “failure” means that the project had no lasting employment effect after the financial support ended. The empirical analysis is based on data collected from the project owners through telephone interviews. The main result is that success is more likely when the project is “businesslike” – for example when the project owner has a good business concept to start with. However, in this case the actual need for support is minor. Instead, a good overall business climate will help the entrepreneur to take advantage of the idea.