Everything from short-term and long-term loans to venture funding, capital financing is critical for business survival and growth.
Any money raised needs to have a purpose: fund equipment purchases, inventory turnover, building projects, etc. Too many businesses raise capital to fund useless activities with no regards to customer acquisition or profit. Sales are the lifeblood of business, driven by customers, and without it death is inevitable no matter how much cash is raised.
The good news is that there are a plethora of places to get money from: banks, private investors, investment funds, loan networks, crowdfunding sites, etc. The bad news is that there are a lot of businesses that want to raise money.
I believe in the power of bootstrapping, and if possible recommend strategies on how it can be done without taking debt or giving equity. However, in many cases, once a business reaches a certain size, it simply cannot grow without financial help.
A simple rule for when to take money is this: if you need to buy something or hire someone because you have too high a demand on your offerings, but not enough cash to deliver, then you take on capital financing endeavors.
I also believe that a business needs to think of its investment worthiness regardless of whether it ever takes on investors. If you have the receivables, a reputable bank may give you a revolving credit line to fund purchases. That is more advantageous to giving up equity or taking long term debt depending on the strategy and interest rate. However, all of the biggest brand name companies took on investors, that’s what makes capitalism (and America) work so well.