“Frobisher was back in England in September and embraced at Elizabeth’s court, where the news was that he had returned with ore to the value of anything between £80,000 and £100,000. Rewards and a knighthood seemed certain. He had pushed through into ‘Meta Incognita’. And in those ‘unknown limits’ was fantastic wealth waiting to be gathered in. At an audience with the queen herself, Frobisher spoke of the riches he had brought home ‘and so great promises of the infinite treasure of this new land, whereof he would possess her majesty surmounting the treasure of the Indies of the king of Spain, whereby he would make her majesty the richest prince in all Europe'[ Alford 2017]”

One tale which will be comprehensible to any startup or angel investor today is Frobisher’s voyages. It is also a tale that will make the modern entrepreneur count his blessings – starting up now runs far fewer risks than 500 years ago, even if some types of government business licence back then are no longer available. Finally not everyone knows that the first English activity in North America was mining rather than colonisation.

Martin Frobisher, after whom Frobisher Bay near Baffin Island is named to this day, was, depending on which article you read a seaman, vice admiral, explorer, privateer, pirate, hostage, spy, double agent or prisoner (variously of the Portuguese, English and West Africans).

Perhaps the nearest modern catch-all term would be entrepreneur – someone who, with the appropriate funding, took whatever risks and engaged in whatever permissible or near-permissible trade might be profitable at the time. To this day entrepreneurs often tread the fine line – or indeed erase it completely and move it – between permissible and non-permissible trade (qv. Travis Kalanick/Uber?). Indeed some boundaries were and are there to be pushed or tested as in practice the line might be unclear. Let us take the example of what gets the likes of Frobisher labelled as a pirate in some accounts whereas he and others literally had licences for certain types of business activity which were seen as kosher at the time. – namely a “Letter of Marque” – a kind of outsourced/privatised warfare/bounty-hunting:

“A letter of marque and reprisal … was a government license in the Age of Sail that authorized a private person, known as a privateer or corsair, to attack and capture vessels of a nation at war with the issuer. Once captured, the privateers could bring the case of that prize before their own admiralty court for condemnation and transfer of ownership to the privateer. A letter of marque and reprisal would include permission to cross an international border to conduct a reprisal (take some action against an attack or injury) and was authorized by an issuing jurisdiction to conduct reprisal operations outside its borders.

Popular among Europeans from the late Middle Ages up to the 19th century, cruising for enemy prizes with a letter of marque was considered an honorable calling that combined patriotism and profit. Such privateering contrasted with individuals conducting unlicensed attacks and captures of random ships, which was known as piracy; piracy was almost universally reviled. In practice, the differences between privateers and pirates were often at best subtle and at worst a matter of interpretation.” [wikipedia]

In 1553 at the age of eighteen Frobisher went on the first English expedition to West Africa, a maternal relative of his, with whom he had lived after the death of his father, having been one of the investors in the expedition. Entrepreneurialism back then involved a little light plundering of Portuguese ships along the way. This was quite kosher at the time. The Pope had divided in the 1494 Treaty of Tordesillas permission to trade globally between Spain and Portugal – east of the west-border of Brazil was Portugal’s monopoly, west of that border Spain’s. Between 1580 and 1640 Portugal and Spain were united in the Iberian Union so it was a de facto religiously imposed trading monopoly. “Free Trade” back in the day meant “Free Trade” for other nations to trade notably the protestant nations of England and Holland.

The risk with early English long-distance voyages was very real – far higher than manned space exploration – no modern person would sign-up. Of three ships and 140 men sent out in 1553 only one ship and 40 men returned. Notwithstanding which the expedition was a financial success (!) and investors funded a further voyage which set sail in late 1554 during which Frobisher was held as hostage on the Gold Coast as a mark of good faith during business negotiations. When the expedition was fired on by the Portuguese they abandoned Frobisher to his captivity who was later handed over to by imprisoned by the Portuguese at their trading post in Ghana until in 1556 he returned somehow to England.

We in turn will return to Frobisher and his Gold Rush later but by way of background to our tale we should note that modern accounts of long-distance Chartered Companies differentiate strongly between colonial and trading companies. Sometimes this was a valid distinction at the time thus for example in 1609 “The Society of the Governor and Assistants of London, of the New Plantation [Colony] in Ulster within the Realm of Ireland” was formed (no desire for snappy company names in those days). It is often forgotten that then, before then and now populations were and are always on the move. In 1600 the global population is estimated to have been only 1/14th of what it is today and with the simple technologies of the day mining and farming were not very advanced – turning land into profit was no easy matter.

This division into “colonisation” and “trading” however is often far more of an ex-post than an ex-ante conceptualisation. Scott whose 1910 three volume opus “The constitution and finance of English, Scottish and Irish joint-stock companies to 1720” is the foundational text on Chartered Companies up to 1720, makes the important point that in the earliest period of chartering overseas ventures – mid 1500s onwards – there was often no clear intention behind English ventures (which also helps explain why the eventual Empire wasn’t A Thing but a collection of very different things). It was perhaps the realpolitik that the venturers mindset, what they did, and what they found at their destinations that dictated the outcome. The relative situation at the destination, the “military-industrial technology gap” compared to contemporary Europe, and in England’s case the centuries later eventual State-centric-driven serious militarism [isn’t all serious militarism State-centric?] were the two factors that led to our ex post differentiation into eg colonisation (eg Americas), trade (passim), trade and ultimately rule (eg India) and de minimis impact (eg China, Japan).

But all of this was centuries away – the merchants at the time knew nothing of this. 16thC England and its monarchs were undergoing enough turmoil at home due to the reformation to have any interest, let alone any ability even if they had wanted to, for example, “Do A Spain” and venture forth and plunder/conquer. Nor did they have the sailing prowess and resources or trading chops and network of the Portuguese who, with the exception of Brazil, largely confined themselves in the East to establishing trading posts with some state-driven muscular trading. The Dutch they set sail for the world amidst a long drawn out Eighty Years War struggle to free themselves of Spanish rule and whilst they were a trading nation had a mixed model where trading and the expansion of State power came hand-in hand.

England in the shape of Elizabeth I had a pretty pure merchant-driven model in terms of delegating authority to sailors, merchants or we might just say “16thC entrepreneurs”. Held back for decades in exploring by fear of the mighty Spanish and Portuguese fleets it was only gradually and in small ways that expeditions were launched in an exploratory fashion. Skirmishing and tweaking of the Iberian tiger’s nose at sea was about the limit of the militarism. Otherwise the delegation to merchants was pretty complete. English merchants qua Guilds had traded on the Continent for decades and England being a poor northern island relied greatly on trade for the materials of all sorts it couldn’t create itself. The evolution of the Guild into the Company which enabled further afield business was a natural step and, for the monarch, came with the promise of riches – and the State in whatever form always lusts after more money and specialises in just taking it from those who sweated to earn it.

So the English mentality was, by the standards of the time, pretty benign and business-orientated with the exception that at sea all European sailing nations embarked in not so friendly rivalry.

North America is a prime example of where history is just “what happened to happen”, a kind of Darwinian evolution of countless circumstances, and happenstances. incalculable by those involved at its inception. What would the world look like today for example if the native Americans, north and south had had superior military technology to the Europeans? The words “rather” and “different” spring to mind.

In North America the Virginia Company (actually there were two) chartered in 1606 is well-known and its democratic governance [2] started a trend which somewhat caught on over there although I assume the vote counting was less “fortified” back in the day. The thirteen colonies and their subsequent history colour all historical framings. But this is to ignore the fact that rather different outcomes obtained in prior centuries notably resulting in two Icelandic Sagas (“The Saga of the Greenlanders” and “The Saga of Erik the Red”), simply planting a flag then going home, attempted trade, failure, no voyage, and Frobisher’s mining fiasco.

“The Society of Merchant Venturers” was a 13thC Guild (which amazingly enough having shapeshifted once or twice exists today [3]) which funded a series of voyages of discovery of Italian navigator Giovanni Cabato – better known by the Anglicised form of John Cabot although he signed his name in the Venetian Zuan Chabotto. Whatever you call him, his was the first European voyage to land in North America since the Saga-generating Norse visits some five centuries earlier, Columbus’ 1492-1504 voyages having landed in the Caribbean and Central/Southern America.

Cabot’s first voyage failed. On his second in 1497 he, believing he had arrived at North-East Asia, planted a flag, saw evidence of, but made no contact with the locals and advanced no more than “the shooting distance of a crossbow”. A pity to go so far for so little although he was handsomely rewarded on his return by Henry VII. On his third and final voyage in 1498 he took goods to trade with – opinions differ as to the outcome but he may well have perished. Overall outcome not a lot, not even some Icelandic Sagas.

In 1566 Gilbert made a pitch to Elizabeth but rather over-egged his pitch-deck. Suggesting he personally be given 10% of the land he found was rather gauche of him especially when the Monarch naturally expected it all to become hers. Instead Elizabeth sent Gilbert off to become Governor of Ulster, which was at least in the right direction if not quite as far as he had desired.

A decade after Gilbert’s failed pitch Frobisher took up the challenge. By now the Muscovy Company, who had the monopoly over northwards travel to Cathay (unlucky, if only they’d known…) were much bogged down with the challenges of Muscovy and had done nothing with its north-west privileges for twenty years. Frobisher like many an entrepreneur today had no dough but secured the aid of the Earl Of Warwick which rather helped him get the licence in 1574-5 (wealthy and influential “friends and family” count a lot to this day in getting startups off the ground). Another important contact was Michael Lok who helped him raise the funds which took even longer in those days than it does now and it wasn’t until 1576 that 18 adventurers (a far more accurate term for startup-funders than today’s overly-prosaic “capital providers”) subscribed £875.

On the first voyage Frobisher made it as far as somewhere he named Mistaken Strait (Hudson Strait) and like Cabot promptly returned home. One of the ragtag things he had found was a black rock the size of a loaf. Lok took the rock to three assayers who declared it worthless but a fourth, Agnello, declared it contained copious gold and showed gold dust as evidence to Lok.

Lok, predating by centuries pharmaceutical companies “file-drawer” approach, duly reported only this result to the Queen. Frobisher had blown more than all of the capital intended to last for two voyages on one, hadn’t discovered anything useful to trade (the Inuit didn’t make much, although did kidnap five of his men who were never seen again, he kidnapped one of theirs), or land worth colonising (Frobisher’s Bay is over 2,000km north of Ottawa – not exactly prime real estate…). However as you can imagine the (alleged) gold was a great help in pitching for the next funding round.

It was now deemed expedient to incorporate the adventurers – as the “Company Of Cathaia”. The “B round” – the second voyage – raised far more £4,875 than the A round (£875) and Frobisher set off and returned with 200 tons of ore. This required quite some smelting so the Cathaia Company set about with some serious vertical integration and built a furnace at Dartford. Frobisher returned to America, got into some heavy mining (the logistics of all this must have been staggering with the basic technology of those times) and this time he returned with 1,350 tonnes of ore. Unluckily for them all this ore turned out, after five years spent smelting in vain, to be near worthless iron pyrite – “fools gold”.

What was North America’s first gold rush is an archetypal tale of the pattern for many a startup to this date and certainly in the dot com bubble. The pattern which, after much fund raising, much activity produces much output, all of it sadly ending up worthless.

It’s also a tale that shows that the politics of how one handles disaster matters more than disaster. Some people are teflon-coated and some are not – even before teflon had been invented. Frobisher went on to be knighted for his part in defeating the Spanish Armada. Lok on the other hand being the Governor of the Company of Cathai ended up in debtors prison several times being held personally responsible for various of the debts. Back in the day there was no running away from the debts you create.

A final irony is that the Cathaia Company sent a fourth voyage under Fenton to Sierra Leone thence Brazil where a good profit was about to be made before the voyage was set upon by a Spanish fleet, the remaining ships made their way home in 1583.

Showing the fickle finger of fate when drawing the fine line between triumph and disaster in entrepreneruialism the profit that would have been made on the last voyage would have repaid the debts from all prior voyages and returned a handsome profit. Instead every voyage made a loss, their governor ended up in the nick and the Company of Cathaia was wound up. Naturally “precarious” and “huge risks” applies to many a venture to this date if perhaps the risk of being taken captive and imprisoned if your negotiations are interrupted or being stormed by the Spanish just as you are finally about to come into profit are less than they were.



[1] The Pope having divided permission to trade globally between Spain and Portugal in the 1494 Treaty of Tordesillas. east of the west-border of Brazil was Portugal’s monopoly, west of the line Spain’s. Between 1580 and 1640 Portugal and Spain were united in the Iberian Union so it was a de facto monopoly. “Free Trade” back in the day meant the ability for other nations to trade globally notably the protestant nations of England and Holland.

[2] The contribution of the Iroquois Constitution has been rightly acknowledged by Congress but not as sometimes loosely-glossed as “the origin of US democracy” – the Virginia Company was “democratic” before it left England, but rather the US Constitution’s founders utilised its approach which, long before the settlers had arrived, bound six nations into a confederation. This binding mechanism had no parallel amongst Chartered Companies (the nearest thing would have been overlapping shareholders, shareholders being way more powerful in the Chartered Company than in the Company Law Company).

[3] It received its first Royal Charter in 1552 granting it a monopoly of Bristol’s sea trade, It continued to control Bristol’s harbour until 1809 and still exists today as a charity


Alford 2017: “London’s Triumph: Merchant Adventurers and the Tudor City”