As new discoveries and economic opportunities became available in the Renaissance, the kings and queens of Europe began to invest in chartered companies. Why were monarchs willing to invest in these sometimes risky business ventures? Most monarchs believed that the companies could serve as their eyes and ears abroad--as spies.
The costs of funding and defending a charter were low and therefore worth the risk and capital involved.
The monarch could expand his or her territory into new lands without the cost or risk required to set up a colony.
The monarch could control the company's every decision from afar, adding to their power.