While making some improvements to the page on rights issues I found my self coming very close to saying that investors should avoid companies that actually make use of equity capital markets.
For an investor capital markets are a means to make money, for owners of a private company they are an opportunity to exit and diversify, for any holder of listed securities they make assets more liquid, but their most important purpose, from the point of view of society as a whole, is to provide a mechanism for companies to raise capital.
Now, consider what value investors look for. Stable strong cash flows and low valuation ratios. If a company has these, it is unlikely to need to raise equity. Even moderate expansion could be funded by debt.
So what about growth investors? Surely they will be happy to see companies raise the money to fund expansion? They might, but they are likely to have reservations about whether the expansion. A high proportion of growth investors, although happy to wait for results, are likely to prefer companies that have done with ploughing large amounts of money into the business — they have no wish to venture capitalists.
The markets even tend to react positively to companies doing the reverse: selling assets (e.g. through sale and lease back arrangements) or increasing gearing.
Listed companies are a very good thing for investors, as long as companies do not actually make full use of being listed.