If an issuing company sells securities to investing public without involving an investment banker, the issue is called direct sale. A direct placement is also known as a direct sale. It is type of offering in which issuing company sells its securities directly to investors rather than through a middleman such as an investment bank.
When a company decides to use a direct sale rather than an IPO, it avoids most of the costs associated with going public. Company that go public through an IPO must use intermediaries such as investment banks to manage the offering process on their behalf.
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