The people who get funding will build, presumably? Investing doesn’t prevent people from building. Investments fund building. (Among other things.) This happens

The people who get funding will build, presumably? Investing doesn’t prevent people from building. Investments fund building. (Among other things.) This happens literally when banks loan money to real estate developers or other large projects. But we’re in a situation where there was, until quite recently, both too much consumer demand (inflation) and too much investment (lots of wasted investment on silly things). Higher interest rates are an incentive to slow investment and consumption and park money in government funds, where it‘s presumably more inert. I think the answer to “what if everyone does it” is that everyone doesn’t do the same thing. If you have a good idea then you can spend your own money on it, and sometimes you have to, but if it’s expensive then it’s probably better to try to raise money from other people.