Question

Why were North American settlements often founded b joint stock companies

Answer 1

Answer:

Because It took many people to share the high costs.

Many North American settlements were founded by joint stock companies because it allowed multiple investors to pool their money together, as many of them could not afford to fund a trip on their own.

Joint stock companies limited the risk and the amount of capital an individual needed in order to be involved in sponsoring a trip to North America. These joint stock companies helped explorers to fund their trips. In return, the investors would receive a certain amount of the resources found or money made of the trip. With the possibility of great profits from new resources found in North America, many wealthy investors used this opportunity to increase their wealth.

Answer 2

The joint-stock company was the forerunner of the modern corporation. In a joint-stock venture, stock was sold to high net-worth investors who provided capital and had limited risk. These companies had proven profitable in the past with trading ventures. The risk was small, and the returns were fairly quick.