I recommend to purchase data and produce your own leads. Whether you do direct mail, powerdialing, fax blasting, email campaigns, or anything else, when you produce your own leads and eliminate competition (eg. not buying aged leads/resold leads) you can max out more deals. From my experience this results in a higher ROI in general.

However, there are certainly difficulties with producing your own leads. For instance, if you direct mail, you have to create a piece, run separate campaigns, track the metrics, rinse and repeat. It can be very expensive to reach the >1% response rate.

Cold calling is labor intensive, takes time, and you have to have the liquid capital to absorb the high turnover/training times.

Scalability is another key factor. Perhaps you find a niche to direct mail to that is working well. Is it duplicatable? Can you reproduce similar results targeting a different demographic/region/industry/revenue?

For many cases to get started it is better to simply purchase leads and get to work. You can always sample generating your own leads once sufficient capital has been obtained. Just measure those metrics and make sure whatever you buy is producing. If not, you can always use their lead campaigns for ideas on what you'd like to try yourself!

However, for most ISO's without significant experience in marketing and measuring, it's best to just purchase leads for your salespeople to work.