Source: The Growth of Virginia's Boundaries,
a "Geography of Virginia" paper written by Karl Phillips in 1999
Virginia's edges were defined initially in charters issued by the King of England as grants of land to private investors, who sought primarily to get rich. The three ships that brought slightly over 100 colonists to Jamestown in 1607 (the Susan Constant, Godspeed, and Discovery) were financed by and filled with people who sought economic advantage, not freedom of religion or increased individual liberties.
The investors were venture capitalists, "adventuring" or risking their wealth in the hope of getting even richer. They incorporated as a joint stock company, the Virginia Company. The London-based investors focused on settling the Chesapeake Bay region. The capitalists based in Plymouth, who were more familiar with the fishing grounds off Newfoundland, focused on settling lands further north.
The First Virginia Charter in 1606 gave the Virginia Company of London all territory from the Atlantic to the South Sea (i.e. to what we now realize is the Pacific Ocean) the right to "begin theire plantacions and habitacions in some fitt and conveniente place between fower and thirtie and one and fortie degrees of the said latitude all alongest the coaste of Virginia and coastes of America." The area between 34 and 41 degrees latitude was everything from present-day South Carolina to New York City. (Actually, due to inaccurate maps and rough measurement in those days, they thought it went north to about where Philadelphia is located today.)
This overlapped with the Plymouth Company right to settle "betweene eighte and thirtie degrees and five and fortie degrees of the saide latitude," so King James I adjusted the London Company's grant with a Second Charter in 1609 specifying settlement was authorized:
"Cape or Pointe Comfort" is the southern tip of the city of Hampton at the site of Fort Monroe. It is at the entrance to Hampton Roads, where the James flows into the Chesapeake. It was named by Captain John Smith in 1608, because it was "comforting" for sailors to see the mainland after entering the Chesapeake after an ocean crossing. Known today as "Old" Point Comfort, it is at 37 degrees latitude, slightly south of "New" Point Comfort at the eastern edge of Mathews County.
The Third Charter in 1612 gave the islands offshore to the "The Treasorer and Planters of the Cittie of London for the First Colonie in Virginia," stating:
This grant was desired by the company because the islands, such as Bermuda, were perceived as more valuable. They could be accessed easily by ship, as the company officials knew only too well. The leaders of the Third Supply to the colony had been shipwrecked on Bermuda in a storm, and spent the winter of 1609-10 building new vessels there to reach Jamestown. Shakespeare may have incorporated stories about that storm into his play "The Tempest."
Those who "adventured" their funds in the Virginia colony received little return on their investment. King James I failed to renew the charter in 1624, making Virginia a royal rather than a proprietary (private) colony. By that decision, King James made the stock in the Virginia Company worthless, the equivalent of declaring the company to be bankrupt. (Venture capitalists do not always make a profit on their investments...)
When later kings chose to create new proprietary colonies in Maryland and Carolina to reward new friends, the grants of land to those proprietors diminished just the king's rights to lands assigned to the Virginia colony. The king did not have to compensate any of his subjects in Virginia or investors in England, and certainly did not compensate the Native American inhabitants, when carving new colonies out of Virginia. However, his change in the boundaries of the Virginia colony did cause some conflict in Jamestown. When the king chartered new colonies within areas defined as part of Virginia by the Third Charter, the Virginia colonial governor and nascent House of Burgesses lost authority to grant property deeds ("patents") to the lands north of the Potomac River in what became Maryland, or south of the 36 degree of latitude (later moved to 36 degrees, 30 minutes) in what became North Carolina.
The claim to political authority over the lands defined in the charters is still part of the Code of Virginia, along with the official release of the Virginia claim to some or all of Maryland, Pennsylvania, North and South Carolina - see highlighted section in Section 7.1-1, "Extent of territory of Virginia under the royal government says: