Small and medium sized enterprises (SMEs) have a great importance in Europe, but the dynamic nature of market has created a competitive incentive among companies requiring them to improve their critical area of knowledge management (KM) and corresponding skills to create new business. More entrepreneurs, more innovation and growth are necessary and this could be realized particularly by supporting young people who would like to be entrepreneurs but the existing education and training programmes are insufficient. Mentoring is in comparison with coaching/counselling a special form of active supporting of entrepreneurship competence, a "natural support" helping also young people with special needs to believe in themselves and boost her confidence. The mentoring approach helps young people giving them practical entrepreneurial support and SMEs to improve the transfer and use of strategic knowledge. Knowledge is the key for all organizations and the success of many of them depends on the effective deployment and continual enhancement of their knowledge base so as to be innovative and to remain/become competitive. The paper first describes the areas of research, mentoring, entrepreneurship education and KM and then used methods and results. Examples for projects supporting the improvement of young entrepreneurship education and KM also by using mentoring are given.