This is a demo store. No orders will be fulfilled.
BECOMING AN INVESTOR - THE IDEA
Investment Sought:
£50,000
Investment Sought:
£50,000
(A shares)
Tax Relief:
50%
Seed Enterprise Investment Scheme (SEIS)
Founder’s Investment:
£100,000
‘Sweat Equity’ (unpaid time): 9 years
THE IDEA
Spaice aims to sell computing, office, and stationery products to home and small business users on-line and for delivery throughout mainland United Kingdom. We plan to provide all the big brands, introduced gradually as their ethical evaluations are independently researched. Spaice aims to supply, small (domestic) electrical and photography products later in 2014.
Spaice is designed as a social innovation - a social mission driven by a commercial model – minimizing marketing costs by forging relations with non-profit partners and offering their supporters a solution to what we believe is the current dilemma of living in the modern world while upholding ethical values.
Our research suggests the computer and office products markets have potential if the retailer can reach a large enough customer base or become highly specialized. Spaice aims to use the ethical and social mission to recruit established and large Non Profit Organizations (NPOs) and leverage their reputations and supporter bases to win new business.
By becoming the preferred retailer to these NPOs we believe Spaice can minimize marketing costs while reaching a very large audience. This is an opportunity to invest in a business that hopes to offer a financial and a social return.
By becoming the preferred retailer to these NPOs we believe Spaice can minimize marketing costs while reaching a very large audience. This is an opportunity to invest in a business that hopes to offer a financial and a social return.
WHAT IS SPAICE?
Spaice is designed as an online retailer that lets the buyer choose the products they need without having to compromise their personal ethics because they can compare and match the manufacturers’ values against their own.
We will, initially, sell computer and office products online with every brand we sell rated for their human, animal, environmental, and corruption records.
At launch we will have 30 of the biggest brands and then add about 10 more every month.
THE BUSINESS MODEL
The model aims to be sustainable, both economically and ecologically so we will not promote or encourage unnecessary consumption – we will aim to satisfy genuine needs of our users without product marketing and hype to create artificial demand.
Our core supporters will be the ethically active. Beginning with the subscribing supporters of our key partners (see those signed up so far listed below under Key Progress) – people who demonstrate a commitment to one or more of the key issues of human, animal, and environmental rights, or corruption.
Our key partners will promote us as a preferred supplier with our compelling social mission and shared values providing the emotional appeal.
Our own direct marketing will centre on the stories behind the products with particular emphasis on social media, blogging, and articles to raise awareness of the issues – showing which brands get it wrong but, more importantly, highlighting the brands that make the most effort to do the ‘right thing’.
The commercial element of the business uses an established online retail model. This means overheads will be minimal to reduce risk, and product prices will be comparable to most of the big retailers – there is no premium for ethical shopping.
KEY PROGRESS
We already have the support of key non-profit organisations including:
- Ethical Consumer
- Whale and Dolphin Conservation
- Resurgence Trust and Ecologist Magazine
- The Green Party of England and Wales
And we aim to sign an agreement with Amnesty International UK on the launch of our e-commerce site.
And we hope to forge partnerships, with even larger memberships, for the Key Issues of environment and animal welfare by 2015.
THE FUNDING
To date, the founder, Vipul Patel, has invested over £100,000 in the form of a director’s loan that will not be repaid until the business can reasonably afford to do so and with other creditors and shareholders having priority.
The funding sought will allow us to complete our fully automated e-commerce store and ethical evaluations of the 130 biggest IT and office supply brands.
THE MARKET
Market Size and Background
In 2008, 78.4% of adults reported that they owned a computer and this rises to well over 80% for those under 55 years of age.
The UK computer and peripheral (excluding software) market grew by 2% to £4.9 billion in 2009, despite the recession, and internet retailing accounted for 9% (£441 million) of this.
The office equipment market was valued at £2.28bn and the stationery market was estimated as £1.53bn in 2009 with far higher margins than the computing sector.
The ethical market continues to grow while the traditional market suffers, growing by almost 33% from to £35.5bn, in 2007 to £47.2bn in 2012
40% of the population actively engage in ethical behaviours and a further 30% sensitive to issues.
70% of shoppers prefer companies that ‘visibly give something back to society’
None of our competitors show any of the ethical behaviours of increasing concern to consumers, while they are all in the Spaice marketing strategy, values, and social mission.
BECOMING AN INVESTOR - THE OPPORTUNITY
HOW MUCH CAN YOU INVEST?
Any amount from the minimum of £10 to the entire £30,000 we need; you will be issued 1 share for every £1 invested.
WHAT TAX RELIEF WILL I GET?
Spaice has received advance assurance from HMRC confirming that it is eligible to apply for tax relief under the Seed Enterprise Investment Scheme (SEIS) which offers you 50% tax relief on your investment, regardless of your income tax rate.
If you have Capital Gains Tax liabilities you may qualify for up to 78% relief.
To qualify for SEIS you must hold the shares for the minimum three years and they must be paid for in full at the time of purchase.
Please note that Spaice cannot advise you on tax issues and we recommend that you satisfy yourself as to your own eligibility to claim this relief, you can see more details at the HMRC website
WHAT RETURN WILL I GET?
We believe the model and investment offer will appeal to the social investor - i.e. those looking for a social return or ethical investment rather than a purely monetary one.
Therefore, the aim is to:
- At the end of year 3 and if in a position to reasonably do so, offer to purchase the shares back (at the original issue value).
- Have qualified for and be listed on the ethical exchange Ethex (https://www.ethex.org.uk) and, if this is achieved, investors will be able to trade shares within the ethical investment market.
SEIS THE CASE FOR THE NEW INVESTOR
WHAT’S THE RISK?
Obviously we think the business will succeed or the founder, Vipul, would not have invested his own money (£100,000) and worked on this project full time and without pay for over nine years.
But there is always risk with a business, and your investment may fall in value if the business preforms badly or you may lose your money if it fails.
However, whatever happens, you will not be liable for anything more than your initial investment - and, with the SEIS scheme reducing your risk, you may be able to offset your losses against your income tax. As with any investment, you should not invest more than you can afford to lose.
CLOSING THE OFFER
What happens if we don't raise enough?
If we are unable to raise the full amount through this share issue and any other loans or grants, your money will be returned in full. Your investment will not be available for Spaice to use until the share offer, along with other funding if necessary, is successful.