What term refers to the initial issuance of securities sold directly to investors?

The term that refers to the initial issuance of securities sold directly to investors is "Initial Public Offering" (IPO). An IPO occurs when a company first sells its shares to the public, allowing investors to purchase ownership in the company. The process involves the company working with underwriters to determine the price of the shares and the amount to be raised, followed by the issuance of shares to investors. This is a significant milestone for a company as it opens the door to public capital and typically involves extensive regulatory requirements and disclosures to ensure transparency for investors.

In contrast to an IPO, a private placement involves selling securities directly to a small group of investors, often institutions or accredited investors, without the need for a public offering. A public offering broadly refers to the sale of securities to the general public but can include diversified methods beyond just an IPO. A direct sale is less commonly used to refer to a systematic process of securities issuance and typically does not encapsulate the regulatory framework associated with offerings to the public or to private investors. These distinctions underscore why "Initial Public Offering" is the most appropriate term for this context.