6 of the most spectacular business failures in history

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Looking back in history, it's not hard to find examples of business failures.

What makes these six ventures stand out as some of the most disastrous are the heft of their consequences, which include rebellions, countless deaths, incredible floral price inflation, and even two countries uniting.

Business Insider spoke with a number historians and authors about several of these unsuccessful companies and ventures that cropped up between the 14th and 18th centuries.

And while many of them noted that the actual economic damage these historical ventures wrought was typically nothing compared to more modern financial crashes, these companies still went down in history as disasters:

The Medici Bank (1397-1494)

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Over the course of its long, opulent history, Florence's Medici dynasty produced three Popes, two queen regents of France, and a bank that became one of the largest and most powerful financial institutions in Renaissance Europe.

In many ways, the Medici Bank resembled any modern bank. It loaned money, held deposits, and opened branches around Europe under one central holding company. The Economist reports that some of the bank's innovations included banning loans to notoriously flaky princes and kings and granting each branch manager a stake in the business.

The bank also closely aligned itself with the Vatican. According to the Economist, over half of the bank's revenue originated from the Pope until 1434. Around that time, the Medici Bank truly began to soar under the leadership of Cosimo de' Medici. The bank's dominance in the financial realm allowed the Medici to unofficially seize control of the Republic of Florence.

The Medici Bank was one of the most powerful, internationally-minded institutions of its time. Writing for Forbes, "The Montefeltro Conspiracy" author Marcello Simonetta discusses Harvard professor Raymond De Roover's 1963 book "The Rise and Decline of the Medici Bank," which argues that the financial institution heralded the focus on private ownership that came to define modern capitalism.

The Economist highlights the bank's immense power in Renaissance Italy: "On one occasion, the records show, the bank got the elevation of a cleric to a bishopric delayed until his father, a cardinal (yes), had repaid his own and his son's debts."

However, the good times didn't last forever. Not every head of the Medici family was as savvy as Cosimo. According to Simonetta, after his death, both the bank and the Medici clan began to "overstretch" themselves. This resulted in a thwarted, but ultimately damaging, conspiracy by the rival Pazzi family.

As the heads of the Medici family became less competent over the years, the bank's influence continued to wane.

Things got so bad that the bank actually began raiding Florence's treasury — even defrauding a charitable fund devoted toward dowry payments, as de Roover points out in an article for The Journal of Economic History titled "The Decline of the Medici Bank."

The Medici Bank finally collapsed in 1494, done in by ineffective leaders, tenuous cash reserves, and France's invasion of Italy.

Virginia Company (1606-1624)

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In the 16th century, England began looking outward. The country had become a major commercial power under Queen Elizabeth I, fostering the rise of many large mercantile operations like the East India Company.

In 1606, King James I issued a charter for yet another trade-based, joint-stock venture: the Virginia Company.

Business Insider spoke with "Land as God Made It" author and Jamestown Rediscovery Foundation president Dr. James Horn about the rise and fall of the Virginia Company, the business venture behind Jamestown, England's first permanent settlement in North America.

The Virginia Company attracted major investors, including one of James's top ministers Robert Cecil, the Earl of Salisbury.

Horn said that the venture was largely driven by two main goals: finding natural resources and precious metals. Products like sassafras, silk, wine, and citrus fruits could make a killing in England and reduce its economic dependence on other European countries. Meanwhile, the English wanted to secure their own source of precious metals — like the Spanish had in Peru and Mexico.

The company was split into two branches, centered in Plymouth and London, respectively.

The Plymouth faction established a colony in present-day Maine, which folded almost immediately. Meanwhile, the the London Company launched an expedition to Virginia in 1607. It got off to a rocky start. For about the first decade, life in Jamestown was marked by disease, starvation, and war with the Powhatan Confederacy.

However, Horn said it's important not to label the Virginia Company as a poorly organized mess. Before Jamestown, every English settlement in the New World had been eventually lost — Roanoke being the most famous example.

"The people in the company did know what they were doing," Horn told Business Insider. "They didn't find what they were looking for — gold, silver, and so on. That shouldn't surprise us, but it shouldn't surprise us either that it was considered quite possible that such mines could exist."

Things began to pick up when tobacco became Virginia's primary cash crop.

"Tobacco is the real game changer," Horn says.

However, the explosion in tobacco production also caused rifts within the Virginia Company, with Parliamentarian Edwin Sandys and the Earl of Warwick Robert Rich squabbling over the direction of the colony. The latter led a faction that mostly was just looking for a positive return on investment.

"Sandys was not so hooked on gold and silver at this point," Horn said. "He's looking for a mixed economy that would encourage people to become hardworking, prosperous, and involved with the commonwealth in Virginia and England."

The success of the colony also attracted negative attention from King James, an early critic of tobacco. Relations further crumbled as he sought to form a marriage alliance with Spain — which actively resented England's presence in the New World.

Mass casualties during the Powhatan Uprising of 1622 helped seal the company's fate. Within two years, the Crown had dissolved the Virginia Company and seized the settlement as a royal colony.

"What brought the company down ultimately was the politics," Horn said.

Tulip mania (1636 – 1637)

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Imagine if a single tulip bulb cost ten times your annual salary.

Well, in 1637, that was the situation in the Netherlands. The country was gripped in a so-called "tulip mania" (which will also be the backdrop of the upcoming period film "Tulip Fever," set to open in February 2017).

Reliable economic data from the time period is somewhat limited, and historians still debate whether or not the phenomenon counts as an early economic bubble.

Business Insider spoke with author Mike Dash about his book "Tulipomania," which documents the floral frenzy. In the 17th century, the Dutch Republic was flourishing after breaking away from Spain and establishing successful trade ventures like the Dutch East India Company.

During this time, the financial prosperity and staunch Calvinist faith of the Netherlands began to intertwine.

"Pretty much the only thing you were allowed to do, in order to show off your wealth, involved things that could be considered the creation of God," Dash said. "Beautiful flowers are a gift from God. It's perfectly acceptable to have a beautiful flower garden outside your country house that you can now afford because you've become rich from the spice trade."

Another cultural quirk of the country involved widespread gambling.

"The Dutch were the biggest gamblers in Europe, essentially," Dash said. "You would find people doing absolutely insanely dangerous things, like taking a bet on the exact appearance of a pillar in Rome and then going to Rome to find out who's right. The most dramatic example I found involved Dutch soldiers actually stopping in the middle of a battle to take a wager on who was going to win the battle that they were actually fighting in."

These national interests in betting and horticulture set the stage for the tulip fever. Tulips had only been introduced to Europe around the 1550s. Some were infected with a mosaic virus, which caused petals to burst out in vivid colors and patterns.

"The tulips that we see today are actually only sort of a pale imitation of the types of flowers that were actually around at the time of the tulip mania," Dash said.

Tulip mania can't really be considered a business — the bulbs were not traded on the stock market — but rather an economic phenomenon. An interest in tulips trickled down from the wealthiest merchants and began to catch on within the general population. Artisans quit their jobs to sell bulbs.

According to Dash, individuals became wrapped up in the quest to acquire the most beautiful blooms — stealing plants and dousing bulbs in red wine in an attempt to dye the petals. Because tulips take a long time to grow and are difficult to cultivate, the quality of the flowers was often spotty.

The mania swelled for some time. Things finally came to a head in March of 1637.

"To be fair to these people, they had no real conception of how bubbles tend to burst," Dash said. "As far as they were concerned, this was a commodity where the price had just risen constantly for years and there were — if you don't understand economics, at least — no obvious reason why it wouldn't continue to do so."

Tulip prices began to crash when buyers simply stopped showing up at bulb auctions. By the end of the panic that ensued, the market was gone.

Despite tulip mania's inclusion in Charles Mackay's 1841 "Extraordinary Popular Delusions and the Madness of Crowds," Dash said that the fall out has largely been over-dramatized.

In the end, courts stopped hearing tulip-related cases, growers lost a lot of money, and most people just went back to their old jobs — including painter Jan van Gayen, a prolific landscape painter. Dash identifies van Goyen's experience as a silver lining of the mania — many of his works would not exist had he succeeded in his tulip hustle.

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