Light

Joint-stock companies investment in overseas ventures

Definition

A joint-stock company is a business entity where different stocks can be bought and owned by shareholders. During the Age of Exploration, these companies were used to fund overseas ventures.

Analogy

Think of it like crowdfunding a new product or idea on platforms like Kickstarter today. Instead of one person taking on all the risk, many people invest a little bit and share in the profits.

Related terms

East India Company: An English company formed for the exploitation of trade with East and Southeast Asia and India, incorporated by royal charter on December 31, 1600.

Dutch West India Company: A chartered company (known as the "WIC") of Dutch merchants that had a monopoly on trade between Africa and America from 1621-1734.

Mercantilism: Economic theory that trade generates wealth and is stimulated by accumulation of profitable balances; this was often the driving economic philosophy behind joint-stock companies.