The variety of financial products available to firms has expanded rapidly in recent decades. We study how this expansion shapes capital allocation, combining granular data on security issuance with a model of strategic product choice. We present three key findings. First, differential product adoption across firms explains most of the observed variation in funds raised. Second, firms that adopt new products are more successful in raising funds. Third, the funds raised from new financial products are often sourced from numerous highly specialized products, suggesting that financial innovation creates new financing channels tailored to the needs of different sectors.