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Digital Business: Spacehop Case Essay Example

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Digital Business: Spacehop Case

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Digital Business: Spacehop Case. The access to early-stage finances by innovative start-up companies has the potential of fostering high-growth innovative and responsive entrepreneurship in the 21st-century competitive economy. Start-ups often fail to qualify for the traditional loans from the banks due to lack of any substantial collateral and perceived high riskiness. Venture Capitalists (VCs) and Angel Investors play a clinical role in bridging the existing financing gap in high-growth start-ups. Business angels are becoming increasingly important to the source of equity capital for at the seed and early set-up stages of a business a field many VCs often shy from.
Angel investors have the following advantages; they increase the supply of financial capital, contribute towards a business’

ability to attract more capital, increase the value of a company through value addition activities and strengths the entrepreneurial environment. Governments also contribute to improving the growth chances of start-ups via exogenous instruments. Such instruments include tax options such as Enterprise Investment Scheme (EIS) in the UK. For an investment to qualify for income relief under the scheme, it must meet some criteria. The business must not be registered in a stock market, it must be registered and have the UK as the permanent resident. Also, its employees should be less than 250during the financing, it should be an independent entity, engage in trade as per EIS regulations and have a gross asset base of less than £15 million before financing and £16 million after the financing.
The Spacehop is a UK London based online start-up company which launched its operations in October 2015 first targeting London metropolitan area but aiming to expand its services to other areas. It was founded in January 2015 by professional barristers Mathew Beatty and Luke Eastwood. The company consists currently consists of a team of five the two founders and three employees. Spacehop qualifies under the EIS scheme and therefore an angel investor investing in the company is eligible to make a claim for income tax relief. Spacehop’s slogan is Their Home. Digital Business: Spacehop Case.

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