But if you have a million in funding, then who does it matter to if you spend it on infrastructure or operational expenses? You're still burning the same amount of cash.
Have you ever tracked your time as a salaried software developer? I used to, and used to think it was a stupid exercise. Then I learned that my payroll costs were being capitalized against the project in development. Two years later when the project launched, it hit the books and started deprecating over seven years. That meant my company essentially had two years where my salary wasn’t on their books; when it hit, those two years were skewed over seven.
Have you ever had to differentiate between tracking time spent doing development and time doing support? Support is an ongoing operational expense that can’t be capitalized.
Same pot of money, vastly different ways to split it up.
Would it make you feel better to consider that those dollars aren't really coming from their bank account in any meaningful sense? They're almost always from a large creditor who extended a line of credit, or from the sale of unsecured debt against the company if you're big and bad enough. And that their "bank account" is almost entirely divorced from cash on hand, and it's built up from money other businesses and customers owe them for services?
We assume that businesses are going to be in business for the foreseeable future, that they'll pay their debts and collect profit on their assets and the world keeps moving. In that sense, corporate accounting isn't the smoke and mirrors; it's the way we give that assumption some basis in reality. We assume that your business will stay in operation and sell the product you helped build, so why penalize them for not being able to get money before the asset is built?
If you’ve ever heard someone talking about “the color of money” in a business context in regards to different types of incoming and outgoing accounts, this is what they’re talking about.
Whether capex is better or worse than opex from any particular vantage point is so heavily context dependent that I’m unsuited to provide a general overview, but it is easy to see how it could matter when you compare expenses attributable to salary vs expenses attributable to the purchase of real property in much the same way it matters to you as an individual whether you used your finances to buy a house or pay someone to mow your lawn.