Toni Ko on Exiting to L’Oréal for $500 Million and Starting Over — Exclusive

Foundr Magazine publishes in-depth interviews with the world’s greatest entrepreneurs. Our articles highlight key takeaways from each month’s cover feature. We talked with Toni Ko about exiting her company and bouncing back after failure. Read excerpts from that in-depth conversation below. To read more, subscribe to the magazine.


Toni Ko is a third-generation entrepreneur who knocked it out of the park on her first try. In its first year, beauty brand NYX brought in $4 million in retail value. Ko credits this immediate success to the right combination of good product, packaging, and price.

But Ko is no one-hit wonder. After selling NYX to L’Oréal for $500 million, Ko took some time to herself for the first time in years. She promptly fell into a deep depression. Craving a new purpose, she started a sunglasses business. It failed after 3.5 years—and Ko says it’s one of the best things that ever happened to her.

The lessons Ko took away from that “failure” empowered her to launch her third and current venture: Bespoke Beauty Brands, which partners with influencer entrepreneurs on everything from concept creation to product development, marketing, and fulfillment distribution.

We sat down with Ko to learn more about her entrepreneurial journey, including the keys to her success, what she isn’t good at (and how she addresses that gap), and what she’s leveraging to grow her next big business.

The Exit

For the first two years of NYX, Ko kept things simple and stuck with her main products. In Year Two, she added a second product category. In Year Three, a third product category. The constant rollout of new products kept the bottom line growing by double digits annually.

“All entrepreneurs are in a constant pressure cooker. That’s guaranteed.”

Out of necessity, that “three” person employee team also grew. But Ko remained ever aware of what she calls the infant mortality years—those first three years when the majority of companies go under. She held fast to the knowledge that companies that make it past those three years often find stability and then major growth.

“At three years, NYX started growing really fast,” she says. She saw another big growth spurt at five years. And then another jump at seven years. Every couple of years, a skyrocket happened in revenue growth. The employee count went to a dozen, 50, 100, 150, and kept growing.

With growth came pressure. “When you have 2–, 3–, 400 employees, sometimes you’re supporting not the 2–, 3–, 400 employees but their extended family members,” she says. “Their salary pays for the children’s college tuition, puts food on [the] table. When you have all these variables, you’re under constant pressure.”

By 2009, Ko knew she needed some smart money—investment capital that came from people with knowledge and connections she did not have—to keep growing. She wanted to get the brand into large national accounts but did not know how to get in front of those buyers or expand distribution nationwide. She went hunting and found an investor group that had recently exited the haircare sector and had sold to the exact vendor she wanted to secure. She sold 20 percent of NYX to the group.

In doing so, Ko also knew she’d set a clock on her ownership of the business. The investor group, like most, would be looking to create an exit in three to seven years.

“In the winter of 2013, we started talking about the idea of possibly exiting the company and started interviewing investment bankers to represent us.”

The next nine months had Ko on a roller coaster of exhilaration and learning new ways.

On July 30, 2014, she sold NYX for $500 million to L’Oréal.

Highest High to Lowest Low

The whole process of deciding to exit to being fully out took an “adrenaline-driven” nine months. Ko was at her desk at NYX when her attorney called. He said the deal was done;check your bank accounts. Ko logged in.

“I counted all the zeros, and I’m like, ‘OK, it’s done. It’s really sold. It’s not mine anymore.’”

She arranged for movers to get her desk and chair. (The desk, now refurbished several times, still serves as the helm of her workplace.)

Packed up the rest in a UPS mailer box. Told the employees goodbye. Walked out the door. Drove home. And slept for 14 hours straight. She woke up in a panic, thinking she was late to work. She dashed into the shower. As she worked shampoo through her hair, she remembered.

“Holy smokes. I don’t have a work to go to.”

The Reality of Selling to L’Oréal | Toni Ko of NYX Cosmetics


Ko was now on the cusp of 40. She slammed headfirst into the experience that so many founders who successfully exit their companies wade through but don’t talk about much: an existential crisis that leads to clinical depression.

“Because we’ve buried our identity, our everything: life purpose, mission, identity, hours. You’ve baked yourself into the companies that you built, and once that gets removed and then you go wait a minute, who am I? That’s the first question. And then why am I here? What’s my next purpose? Suddenly, you have all these hours. You’re so used to working all the time, and you have all these leisurely hours, and you don’t know what to do with all the time. I fell into a deep, deep, deep depression.”

Ko sought therapy, but it didn’t completely address her loneliness or her need for purpose and activity. Unlike other founders, Ko had not built a family while building her business. She had no children or spouse to focus on. To save herself, she started another company: a sunglasses business.

Though she worked hard at it for 3.5 years, the business ultimately failed.

“It was probably the best thing that had happened to me,” she says, “because it was truly experiencing my ego death and I’m very grateful. If I had to do it again, I would actually do it again. So I could learn from that mistake. Because what I learned from that mistake has taught me so much. So I am able to start my third business, apply the learnings that I had, and make this company a success.”

That third business is Bespoke Beauty Brands.

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Round Three

Part of her exit with L’Oréal was a noncompete that required Ko to stay out of the beauty business for five years. It was a strict agreement: She could not invest, advise, sit on a board, or have anything to do with the beauty space for those five years. She was completely locked out of the industry she both consumed and helped create.

“But time passes,” Ko says. “Time solves everything.”

On July 30, 2019, the noncompete expired. On Aug. 1, 2019, Ko launched Bespoke Beauty Brands (BBB).

“I gave it a 24-hour window,” she says.

In those five years, Ko noted how consumer consciousness and behavior shifted. She saw how consumers became informed, aware, and savvy. They no longer wanted to be part of a brand like NYX that had 18,000 SKUS—something to serve everyone. Today’s beauty consumers want a brand that serves them and them alone.

She decided magic could lie in partnering with celebrities and influencers to build beauty brands for specifically targeted demographic consumer bases.

On Oct. 18, 2019, the first Bespoke Beauty Brand launched—a makeup line with beloved Korean American drag queen Kim Chi. (For those not in the know, check out season 8 of Ru Paul’s Drag Race.) Chi boasts an Instagram following of 2 million. Ko and Chi launched a makeup line that is in keeping with the drag queen’s brand of loud and proud to appeal to Chi’s followers. With the slogan “Pigmented and Proud,” Kim Chi Chic Beauty led with an eye shadow palette of bright colors like pink, yellow, and green. The palette was named, appropriately, Rainbow Sharts. Almost 700

Target stores carried it for the initial rollout. Upon launch, the newly-created Instagram account @kimchichicbeauty picked up 60,000 followers. (At press time, it had 287,000 followers.)

The second BBB rollout came via a partnership with fashion designer Jason Wu. His 500,000+ Instagram followers spent millions on the initial product offering of Jason Wu Beauty, which 200 CVS stores carried for the rollout. The newly-created Instagram account for it, @jasonwubeauty, picked up 12,000 followers at product launch. (At press time, it had 32,400 followers.)