Due Diligence For


Ellison Eyewear

By January 23, 2017Due Diligence

Company Overview –

Ellison eyewear is building an eyewear brand that strives for the highest quality, does good and has an integrated social mission, and focuses on customers with a lifetime client service model. Each pair of glasses is handmade using the finest Italian materials. Through their Club Ellison, customers are able to replace lost, stolen or broken glasses for 50% off retail. With every pair of sunglasses or Club Ellison memberships sold, they will either provide spectacles for children, build vision centers for the poor, or train eye health personnel.
*Souce: Republic

Company Investment
Name: Ellison Eyewear Minimum Raise: $50K
CEO: Aristotle Loumis Maximum Raise: $750K
Company Founded: 2014 Structure of Raise: Crowd Safe
Location: Chicago, IL Valuation: $4M Valuation Cap, 20% Discount
Crowdfunding Portal: Republic Minimum Investment: $30
Crowdfunding Link: https://republic.co/ellison  
Website: http://wearellison.com/  

Review Overview

Positives Risks and Reservations
The target demographic is young, fashion sensitive and eager for alternatives in purchasing opportunities, style, and price to the near monopolistic power of the two dominant manufacturers. Crowd SAFE offers investors limited rights and leaves the time of conversion up to the Company.
Ellison has a strong management and advisory team with a variety of skills and backgrounds. Competition includes large, aggressive multi-nationals that have near monopoly power along with other small, internet-based companies relying on similar sales strategies as Ellison.
Large competitors have a history of acquiring successful startups, so the path to an exit is clear. The three critical materials for manufacturing, are single sourced from three providers.
Proceeds from this crowdfunding are not necessary to continue operations, assuming closing on other investments.  Proceeds would be used for growth of the business. CEO has no startup experience prior to this company.
If you are interested in social benefit, Ellison’s focus on doing good by donating to charitable organizations and participating in community outreach activities will appeal to you. If you are not a socially conscious investor, Ellison’s focus on socially conscious behavior may be seen as a distraction from growing the company in an extremely competitive environment.
Investors get “perks” based on the size of their investment, including the right to receive one or more pair of Ellison sunglasses.  This is an unusual benefit of this offering, more common in a traditional crowdfunding.  This also increases near-term sales and the odds of future sales through their Club Ellison program.


The eyewear industry is headed by a handful of giant corporations, who currently own the rights and licenses to today’s biggest fashion brands and distribution channels. This causes consumers to pay higher prices for lower quality products.


Ellison has built a brand that strives for the highest quality by producing hand-crafted goods using the finest Italian materials. They give back by providing eyesight to those in need and they focus on customers using a lifetime service model.

Long Term:
Ellison wants to expand online sales to become the dominate sales channel due to higher margins.  Ellison also wants to develop a prescription eyewear line.

Business Model

Ellison makes a profit with a four-point sales strategy that is built around a direct to consumer approach. The four sales channels include wholesale, pop-up and direct (70% of sales), corporate and online. Wholesale has a $24.77 cost/unit with a 2.9X margin. Pop-up and direct has a $23.57 cost/unit with a 4.5X margin. Corporate has a $23.57 cost/unit with a 3.6X margin. Online has a $35.10 cost/unit with a 5X margin.  Unit costs are expected to decrease as volumes increase, however, unit costs are subject to considerable variability due to foreign currency exchange issues and costs of materials.


  • Operational for 2 years with 125% average yearly growth rate
  • Expanded into 60 brick-and-mortar stores globally in 2016
  • Club Ellison, the lifetime membership model, priced at $10.00, was launched in June 2016 and has acquired over 1,200 new members.
    *Source: Company provided on crowdfunding campaign website

Senior Management Team

  Aristotle Loumis Ravi Patel John Roa
Position: CEO/Founder Co-Founder/Growth Strategist Partner/Technologist
Ownership Percent: N/A N/A N/A
Linkedin: https://www.linkedin.com/in/aristotle-loumis-21562050 https://www.linkedin.com/in/ravi-patel-7ba85923 https://www.linkedin.com/in/johnroa


  • Scott Kitum – CEO, Technori
  • Tim Huizenga – President Huizenga Consulting
  • Chad Bronstien – SVP, Amobee

Aristotle Loumis, the CEO and board member, is a young entrepreneur with a big vision, but this is his first startup.  Ravi Patel, the other board member and John Roa both have significant startup and emerging company experience.  In addition, the company has a number of highly qualified and diverse advisors.  If the management team, especially the CEO, is willing to listen to the advisors, management should not be an issue.

Market Analysis

Industry: Eyewear Industry

TAM (Total Addressable Market): $112B
*Source: Company provided on portal page

Driving Trends: Expected to reach $184.03B by 2024

Industry Opinion:
This industry is a classic example of both significant opportunity and risk in a near monopolistic market.  On the risk side, the market is dominated by two very large, multi-billion dollar companies that control both vertical and horizontal supply chains. These competitors have demonstrated a willingness to use their market power to either destroy or acquire smaller competitors.  On the opportunity side, Ellison may be able to exploit increased customer awareness of new buying options (pop up and online being most prevalent), the high cost of major competitors products, and a focus on social good that is attractive to Ellison’s target demographic.  Ellison also faces competition from other startup glasses companies seeking to exploit these same trends.


Key Differentiator:
If you like socially responsible companies, Ellison’s focus on doing good will appeal to you and is a big differentiator from its larger competitors.  In any case, Ellison’s focus on young, fashion-conscious purchasers and its hoped-for ability to predict and create fashion trends may differentiate it from large corporate brands that lack direct customer connections.

Main Competitors:



Safilo Warby Parker



$9.8B (2015) $1.33B (2014) N/A


Estimated Market Share

80% 10.8% N/A


Funds Raised

N/A N/A $215M



http://www.luxottica.com/en  http://www.safilogroup.com/en/ https://www.warbyparker.com/     


Competitive Summary:
This industry is extremely competitive.  One competitor owns approximately 80% of the market, the second largest owns approximately 10.8%, leaving only 9.2% for other competitors without a change.  This massive market power gives these two competitors huge advantages in marketing, sales, manufacturing costs, access to materials and perhaps most importantly, well-known brand names that drive buying decisions.  Newer competitors relying on similar marketing and manufacturing strategies to Ellison are emerging and are raising significant funds to compete.  Finally, there are numerous other startups seeking to enter this market.

Company Financials

Revenue to Date: $243,000

Revenue Last Fiscal Year: $109,947

Previous Funds Raised: Ellison has raised at least $380,000 through issuance of convertible promissory notes

Use of Funds

  • Develop prescription eyewear
  • Help cut overall costs related to product development
  • Geographic expansion
  • Data analysis of product development and online conversion strategy to make that area of the business more sophisticated

Exit Opportunities

Expert Opinion: The most likely exit is to be acquired by one of the larger, better-funded competitors, including Luxottica, Safilo or Warby Parker.

Recent Acquisitions in the Field

Date Company Acquired Acquired By Amount
Aug. 16, 2016 MyOptique Group Essilor $147M
Feb. 27, 2014 Coastal.com Essilor $430M
Jan. 7, 2014 Glasses.com Luxottica Unknown

Expert Opinion Summary

Ellison will have to grow a loyal customer base very quickly, maintain a competitive price against better-funded competitors while keeping its cost of good and margins in line with its growth goals.  While Ellison has had success with wholesale and pop-up/direct sales, it recognizes it must transition to primarily online sales model, where margins are excellent  The market power of its main competitors, especially in brick and mortar stores would likely make significant expansion in the brick & mortar channel extremely difficult. The socially responsible aspect of this company is different from most of its competitors and for investors and customers who value this, it could be a key differentiator. However, history has generally shown that customers buy based on brand recognition and price.  It is unclear if socially responsible activities would be enough to either overcome lower brand recognition or better yet, create and enhance Ellison’s own brand.

Finally, the structure of the Crowd SAFE raises concerns with how a return would be handled. With the terms of conversion being left to the discretion of the company, the Crowd SAFE wouldn’t appeal to many venture capitalists.

AngelList: N/A
Crunchbase: N/A

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Todd Taylor

Todd Taylor

Senior Business Attorney at JUX Law Firm
Todd helps entrepreneurs with challenging legal issues facing their businesses. For almost 20 years, Todd has provided practice legal advice on business formation, angel and venture financing, contracts and buying and selling businesses. Todd enjoys working with technology companies, including those in cleantech, energy, food and agtech, IoT and manufacturing. Todd also represents investors in early stage companies and has been involved as a co-founder in a number of start up companies.
Todd Taylor

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