Christopher Columbus was an old-time entrepreneur. He was willing to take great risks and expose his credibility to ridicule in order to obtain a profit. After being denied financial compensation from several sources, he eventually approached the thrones of King Ferdinand and Queen Isabella of Spain hoping to find them in a giving mood.
Recently turned away by the King of Portugal, Columbus made his case before the Spanish monarchy. Imagine a scene not unlike a modern-day episode of Shark Tank. Columbus had the challenge of convincing his audience that it was a shorter journey to the Indies by going west. Conventional wisdom of the day held that east was the proper course to take.
The task was not an easy one. Spain was just wrapping up a war to drive Muslims from the nation. Advisers to the monarchs strongly recommended sending Columbus away without the benefit of any donation.
However, the monarchs were interested. If Columbus could get to the Indies faster, they could gain an advantage in trade over their European rivals. They also were interested in spreading Catholicism to areas around the world. Columbus was willing to bring some financing to the table himself—financing he had obtained from creditors outside of Spain. The Spanish crown would contribute a much larger amount from its treasury in the Spanish currency of the day (maravedí). Even after this generous donation, more was needed to embark on such a journey.
Enter the city of Palos. The King and Queen ordered the port city to provide two ships to Columbus for a year. This was done to settle an outstanding court case in which the city still owed payment. At last Columbus had the necessary funding to begin his famous voyage. As part of the deal, Columbus was allowed to keep a small percentage of any riches he would find.