After over two decades of being an entrepreneur, and advising other entrepreneurs and growing companies, I have found one recurrent theme running through all of these businesses: Capital is the lifeblood of a growing business. In an environment where cash is king, no entrepreneur I have ever worked with seems to have enough of it. One irony is that the creativity entrepreneurs typically show in starting and building their businesses seems to fall apart when it comes to the business planning and capital-formation process. Most entrepreneurs start their search without really understanding the process and, to paraphrase the old country song, waste a lot of time and resources “lookin’ for love (money) in all the wrong places.”

Virtually all capital-formation strategies revolve around balancing four critical factors: risk, reward, control and capital. You and your investors will each have your own ideas as to how these factors should be weighted and balanced. Once a meeting of the minds takes place on these key elements, you’ll be able to do the deal.

Risk. The venture investor wants to mitigate its risk, which you can do with a strong management team, a well-written business plan and the leadership to execute the plan.

Reward. Each type of venture investor may want a different reward. Your objective is to preserve your right to a significant share of the growth in your company’s value, as well as any subsequent proceeds from the sale or public offering of your business.

Control. It’s often said that the art of venture investing is “structuring the deal to have 20 percent of the equity with 80 percent of the control.” But control is an elusive goal that’s often overplayed by entrepreneurs. Venture investors have many tools to help them exercise control and mitigate risk. Only you can dictate which levels and types of controls may be acceptable. Remember that higher-risk deals are likely to come with higher degrees of control.

Capital. Negotiations with the venture investor often focus on how much capital will be provided, and when; what types of securities will be purchased and at what valuation; what special rights will attach to the securities; and what mandatory returns will be built into the securities. You need to think about how much capital you really need, when you really need it, and whether there are any alternative ways of obtaining these resources.

Regardless of the economy, there are key components of a company that must be in place and clearly demonstrated to the prospective investor. These components include: a focused and realistic business plan; a strong and balanced management team with an impressive individual and group track record; targeted markets that are rich with customers; and some sustainable competitive advantage, which can be supported by real barriers to entry.

Finally, there should be some sizzle to go with the steak, which may include excited and loyal customers and employees, favorable media coverage, nervous competitors who are genuinely concerned that you may be changing the industry, and a clearly defined exit strategy that allows your investors to be rewarded for taking the risks of investment within a reasonable period of time.

Andrew J. Sherman is a partner at Washington-based Dickstein Shapiro LLP and founder of Grow Fast Grow Right, an education and training company for executives of middle market companies.