Beautycounter’s founder sold the $1 billion business and lost her job—now she’s back as CEO: 'Failure is not an option'

This story is part of CNBC Make It's The Moment series, where highly successful people reveal the critical moment that changed the trajectory of their lives and careers, discussing what drove them to make the leap into the unknown.

Gregg Renfrew built a billion-dollar brand, only to end up on the outside looking in after investors brought in a replacement CEO.

Renfrew, 55, founded clean beauty brand Beautycounter in 2011 with the mission of disrupting the cosmetics industry by only selling products made without "questionable or harmful chemicals."

Beautycounter started out selling makeup and hair care products directly to consumers on its website, as well as through a network of sales representatives, or advocates. Today, the brand has roughly 65,000 advocates, according to a company spokesperson, many of whom plug the company's products on social media and receive a commission on resulting sales.

Beautycounter has two brick-and-mortar locations, one in New York and one in Denver. A partnership with Ulta Beauty last year put its products in the retailer's 500 locations across the U.S.

Along the way, Renfrew and Beautycounter raised more than $93 million from investors, according to Crunchbase. Then, in 2021, private equity giant The Carlyle Group bought a majority stake in the business. Carlyle did not disclose how much it paid, but the firm said the deal valued Beautycounter at $1 billion. 

Under a year later, the private equity owners informed Renfrew that the job of unlocking Beautycounter's future growth should go to an outsider: longtime cosmetics executive Marc Rey, who replaced Renfrew as CEO in February 2022.

Though Renfrew remained with Beautycounter as executive chair and chief brand officer, she took the news hard. A serial entrepreneur who started a house cleaning business as a 19-year-old college student and later sold an online bridal registry to Martha Stewart, Renfrew was used to calling the shots and still felt she was the best person for that job. 

She didn't have to wait long for a chance to prove herself right.

Rey lasted just 16 months as CEO. Carlyle appointed an interim CEO in June 2023 without a detailed public explanation. Earlier this month, the private equity firm announced that Renfrew would return as CEO. (Carlyle declined to comment when reached by CNBC Make It.)

When Carlyle approached Renfrew, she tells CNBC Make It, she was just "crazy enough" to accept. She aims to continue shepherding Beautycounter through what she hopes will be a new stage of growth, while burnishing her own legacy as its founder.

"At the end of the day, I believe in the company. I believe in its mission. I set out to change the world [and] I really mean that," she says.

In a statement announcing Renfrew's return to the CEO role, Beautycounter board chair and senior advisor at Carlyle Roberto Marques said that Renfrew "has a proven track record at the company for driving results and engaging both advocates and associates who work alongside her to make meaningful change."

Here, Renfrew discusses what it was like losing control of the company she built from scratch, why she still doesn't regret selling a majority stake, and the risks of stepping back into her old job.

CNBC Make It: Carlyle asked you to step out of the CEO role of the company you founded. Was that a tough pill to swallow at the time?

Renfrew: It was really, really difficult. [Carlyle and I] had discussed me bringing in an operating partner from the beginning, so that I could be more focused on our community of independent advocates, and be the face of the brand and focus on our advocacy efforts in Washington. But it's always hard for any founder to lose control or to be not making all the decisions. 

It's just hard when you've had control over your baby. … It's your vision, and it's your brand, and it's your identity. Of course it's difficult to separate. I don't think there's a single founder that would tell you it was easy. It just isn't easy for anyone.

It doesn't mean that it's the wrong decision, necessarily. But it is not easy for anyone.

Do you have regrets now?

I don't regret selling the business. The work that we do is important. And I wanted to make sure that the work and the company would last the length of time.

I sold the business right before the world opened up with Covid and so much was changing and swirling around. Could we have made better decisions in moments? Sure. Have we made some really good decisions? Yes.

So it's a combination of both and I can't live in regret with any of these decisions because they're already made.

You can only look to do better in the future because you can't focus on what happened in the past.

What went through your mind when you first realized returning as CEO was an option?

There was unresolved and unfinished business that I needed to come back to do. I feel responsible to carry this torch forward, knowing what I know and having achieved what I've achieved. I know that I'm the best person to do this job.

The future for Beautycounter is not only bright, but there's enormous potential for this brand [and] this ecosystem that we've created with independent sellers and an omnichannel approach with a stronghold in Ulta Beauty and our ecommerce platform. There's opportunity within the business model, there's opportunity to continue to serve our mission, [and] there's opportunity to economically empower women primarily. 

I'll do my best. I don't have all of the answers, but I do have the vision and the commitment. And I believe that we can continue to lead and disrupt.

Did you weigh the risks of returning to the CEO, both to your legacy as founder and to the company overall if this stint isn't successful? Did you consider saying no?

Yes and yes. I definitely considered not returning as CEO. It's a huge undertaking. And, yes, of course, I worry about my legacy. I always worry. Everything keeps me up at night, in terms of this business. 

But I've said this from day one: Failure is not an option. 

All I can do is surround myself, which I always have, with the best and brightest, to lean into the community of people that have built this movement, and to be curious, to ask tough questions, to think about where things are going, to be willing to flex and to change. 

We have an enormous opportunity. And I have no intention of having a conversation with you, two years from now, about how my legacy is tarnished because of Beautycounter. I'd much rather you [say], "They're talking about you like they were talking about Steve Jobs. He was out and then he was in, and look at what Apple looks like today."

That is my intention at Beautycounter, to blow this thing out in the most positive way. 

What do you think a founder can bring to a business as a leader that can't be replicated?

At the end of the day, the founder has the vision. And I think that executives can take over from founders if they respect the original vision — the DNA of the brand, the core tenets of why the brand exists.

One of the things that I think is important for us in this moment is to really focus on why I started this business in the first place. Who are we, what do we stand for? That's something that only a founder can really impart to the team. 

I think that this is a win for founders everywhere, because sometimes founders, especially female founders, are overlooked or underestimated. People say founders are crazy, or whatever, but they're just passionate people who see what seems impossible and know that it is possible. They are problem solvers.

This interview has been edited and condensed for clarity.

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