What's meant by capital investment?

Capital investment refers to the use of financial resources to generate long-term value for a business. This involves investing funds, typically through cash, debt, or equity, into a project with the goal of creating assets that will generate strong cash flows and returns over time. Successful capital investment should result in sustainable value creation, while unsuccessful investments can lead to loss of capital.

For example, if a business has a promising idea for a new product or service but lacks the necessary funds to develop it, it may seek capital investment from various sources such as friends, family, venture capitalists, or banks. These investors will provide the business with funds in exchange for expected returns, obligations, and rights as either lenders or shareholders. The business can then use these funds to develop and grow its idea, with the ultimate goal of creating a profitable venture that benefits both the business and its investors.