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Sea transport was hugely expensive and risky: building giant ships, supplying and paying crews for voyages lasting years, and huge rates of loss (20% was common
by resolutebat 3y ago
Sea transport was hugely expensive and risky: building giant ships, supplying and paying crews for voyages lasting years, and huge rates of loss (20% was common). But unlike land transport, it scaled very well, so this was a direct trigger for creating companies as we know them: merchants would band together to finance the expeditions, and then collect outsize returns (400%+ was not uncommon) for successful ones, much like VCs today.
- Cthulhu_ 3y agoI'm sure this is well-known, but the dutch East India Company invented investing, having investors invest in a future voyage, paying the upfront cost of the journey, reducing the risk of the company, and if the journey was successful they would get a profit. https://en.wikipedia.org/wiki/Dutch_East_India_Company https://en.wikipedia.org/wiki/Dutch_East_India_Company
- merry_flame 3y agoRisk sharing with investors predates the VOC by a few centuries if not millennia. iirc Hansa merchants invested in the modern sense and the Code of Hammurabi, written around 1700 BCE, provides a legal framework to things that could be construed as invested. The Italian republics, China, etc. probably have more of the same.