8-bit floating-point representation
With 4 bits you can represent 16 different values: 0,1,...,15. If you want to allow negative exponents it makes sense to take (approximately) half of the possible values to mean a negative exponent. By adding 7 to the exponent you map the values -7,-6,...,0,1,...,8 to the representable range. You might also want to look up two's complement.