(FORTUNE Small Business) – "Those of you who knew Bob knew that if something was worth doing, how did he do it? He did it big, didn't he?" Nods of agreement among the hundreds assembled at a memorial service in Shepherd of the Hills Church on this Friday morning. Among them family members, friends, business associates, former employees, and a brunette named Kelly, who says she met Bob at the bar at Monty's Steakhouse on Topanga Canyon Boulevard. ("I thought he was shy," she whispers. "I guess he was depressed.") The carpets in the wood-beamed sanctuary are the same hazy blue as the sky over the San Fernando Valley. "He did it with class," says the pastor. More nods. "He did it with splash."

Always. Bob Solomon drove a Rolls-Royce. He smoked Cuban cigars and drank Maker's Mark. He lived behind iron gates in a white-columned mansion at the top of a tony Woodland Hills, Calif., cul-de-sac. When he took his daughter Sara out to dinner, he would start by ordering every appetizer on the menu. He gave his second wife, Leigh, a $100,000 Bentley on their tenth anniversary. He hired Lou Rawls to sing at his marriage to his third wife, Jamie. To every one of his employees at Applause—the toy company he joined as a young salesman while still in college and helped build into one of the largest nondefense employers in the Valley, with a staff of more than 400—he offered a free manicure or pedicure on Tuesdays and a free car wash on Fridays. He had a habit of arriving late for meetings, especially if he was the host and vendors were involved. Solomon didn't mind keeping 20 people waiting. That was the point. Silence in the room, anticipation, maybe a little fear, definitely respect; everybody keyed on the empty chair at the head of the table.

Robert George Solomon committed suicide on Friday, Aug. 20, 2004. He was 50 years old. He left behind three ex-wives, two teenage daughters, a 9-year-old son, and one very big mess at Applause, which has since filed for Chapter 11. Applause had been in deep trouble for some time. One of the last phone calls Solomon made on the day he died was to a business reporter at the Los Angeles Daily News who was working on a story about the crisis at Applause. "How much am I not going to want to read the paper?" Solomon asked the reporter, and he was right to worry. The once-thriving company had recently lost lucrative licenses with Disney and Nickelodeon. Solomon's huge bet on a retro line of plush toys called Dream Pets was not paying off. Only about 25 employees remained; lawsuits from vendors, contractors, and licensors were piling up; and Applause was facing imminent eviction from its headquarters, where the lobby walls were decorated with glowing press clippings from happier days.

It's tempting to blame Bob Solomon's suicide on the failure of his business. Financial ruin is a classic "precipitator," as the suicide experts say. Entrepreneurs who attach their personal sense of worth and meaning to the fate of their companies are playing a risky game, with grim potential consequences we're reminded of again and again. In late 2003 a restaurant owner in Alabama named Gregg Davis, with mounting debts, locked himself in his house and set fire to it. Around the same time, James Thaxton, the 57-year-old CEO of an insurance company in Lancaster, S.C., reportedly asphyxiated himself in his garage shortly after his company filed for bankruptcy. Back in 1921, Senator John Kerry's paternal grandfather, Frederick Kerry, walked into a washroom at Boston's Copley Plaza hotel and shot himself in the head, reportedly because he was despondent over the failure of his shoe business.

But financial ruin by itself is never the whole story, says Lanny Berman, executive director of the American Association of Suicidology. "Thousands of people cope with business failure, and they go on to something else," Berman says. "Often more failure." Indeed, failure—experiencing it, learning from it, trying again—is at the heart of the entrepreneurial ethos. You don't get to be a player like Bob Solomon without surviving countless setbacks, some of them devastating, and afterward you don't apologize for them. You wear them like medals.

Suicide is the 11th leading cause of death in the U.S. It claims more lives than homicide: 30,622 in 2001, the most recent year for which statistics are available. To the extent that there is a demographic profile, Bob Solomon fit it. Men are four times more likely to kill themselves than women are (though women are ten times more likely to try). For white males like Solomon the suicide rate is twice as high as for nonwhites. It is higher in Western states than in the East or the Midwest, and substantially higher for the divorced, separated, and widowed than for those who are married. Bob Solomon killed himself in his backyard near the end of a perfect summer day, and that, too, fits the profile. Contrary to popular belief, the suicide rate rises in summer and falls in winter. Thanksgiving and Christmas are actually below-average days. Finally, Solomon used a firearm, as do 60% of suicides, and he died at home (83% of the people who died by gunfire at home in 2001 were not intruders or accident victims or parties to a family quarrel, but individuals who shot themselves on purpose).

But demographics tell us no more about the person who ultimately chooses suicide than does the existence of a precipitator. The key factors, according to Berman, are depression (or some other significant mental disorder), substance abuse, and social isolation. "And then a whole variety of other things," he says. "Hopelessness, shifts in the way one thinks, cognitive rigidity, not solving problems very effectively. And for males, not seeking or receiving help, which is fairly common and distinguishes us from females. It's one reason male suicide rates are higher."

All of which describes Bob Solomon in his last days. Finally he was a boss, of course, alone at the top, and so he was vulnerable in a unique way. People who reach the highest levels in business often don't have colleagues anymore—all they have are competitors.

"Nobody's really watching them," says Ronald Maris, director of the Center for the Study of Suicide and Life Threatening Behavior at the University of South Carolina. "It's like, Who guards the guardians? When they get in trouble, a lot of times people don't notice. Or if they do notice, they're not placed in the hierarchy in a way where they could say, 'You've got to get help.' Nobody's going to make the boss get help."

I'm in the love business," Bob Solomon used to tell reporters, but truthfully the $20 billion toy industry, with its cluster of small and mid-sized firms in the San Fernando Valley, is no more about love than its raunchy Valley neighbor, the porn industry. "The joke is that people are in toys because they're only slightly too nice to be in garments," says Chris Byrne, a New York toy consultant. Others compare toys to the oil business: You pray the gusher comes before you go broke drilling dry holes. Applause's specialty was the industry subset known as plush: cuddly stuffed toys that are licensed from intellectual-property owners such as Disney and United Media, manufactured in China, and sold all over the world. The potential payoff is beyond thrilling. H. Ty Warner, 60, of Chicago is among the richest men in the world—worth $5 billion—because he created Beanie Babies.

Solomon got his start in 1975 as a western New York sales rep for Wallace Berrie & Co. of Van Nuys, Calif. "We were a growing company, and Bob was one of those guys who worked hard and moved ahead," says Wallace Berrie, now a consultant. Solomon soon dropped out of the University of Buffalo, where he was studying music, and went to work full-time. He called on toy stores, gift shops, and card shops, selling, among other things, Smurfs, a Belgian import that landed in the U.S. in 1979. "We were the exclusive distributors of Smurfs in the Western Hemisphere," says Berrie. "Once the TV show arrived, they exploded, and we were riding the crest." Berrie cashed out at the top in 1982, leaving two former partners in charge. Solomon later moved to the West Coast to join those partners. When Wallace Berrie & Co. bought Applause from Warner Bros. a year later, Solomon took over the division as president and got equity in the company.

Bob's father, George Solomon, had started as a bank janitor in Tonawanda, N.Y., near Buffalo, and climbed all the way to vice president; Bob, the youngest of four children, displayed the same drive. Before long, he was running the whole company, now known simply as Applause. Sales doubled between 1986 and 1988, to $200 million, on a string of powerful licenses, including the plush rights to Cabbage Patch Dolls, E.T., and the Little Mermaid—all deals attributed to Solomon. It was Solomon who reportedly partnered with the California Raisin Advisory Board to develop an unlikely hit, California Raisins dolls, ultimately worth hundreds of millions of dollars in worldwide sales. Solomon also took credit for the 1988 leveraged buyout of Applause by the Thompson family of Dallas (which also owned Southland Corp., parent company of 7-Eleven) for $116 million, which made him a wealthy man. He was still in his early 30s.

After the buyout Solomon was named CEO. "The timing was unfortunate," says Berrie. "He had an unbelievable debt load. California Raisins I'm sure was very profitable, but when you have a popular licensed product, you start to lean on it. Your salesmen become lazy. You're making a lot of money, but you could be mortgaging your future." After three tough years, Solomon left Applause and joined a group of investors who bought Dakin, a once-proud competitor (former Dakin CEO Harry Nizamian is known in the trade as "the father of Garfield"), that had recently fallen on hard times. Solomon became the new CEO. He moved Dakin from South San Francisco to the San Fernando Valley, signed an exclusive deal with the creators of a little-known purple dinosaur named Barney, and doubled profits on sales of $70 million. In 1995 he merged Dakin into Applause and sold out to Roy Disney's investment firm, Shamrock Holdings. As part of the deal, Solomon signed a $200,000-a-year "consulting" contract barring him from competing in the toy business for four years. He and a partner launched a marketing firm and went looking for deals.

By now everybody in the toy business knew Bob Solomon—he made sure of that. "A very effervescent, charismatic person" is the way Steveanne Auerbach, a veteran San Francisco toy consultant, describes him. "The most energetic, enthusiastic salesman I ever met," says John Eyler, CEO of Toys "R" Us. Those same qualities made Solomon a terrific promoter too, even if there had always been whispers that what he promoted best was himself. In the late 1990s he took to telling reporters he "helped launch" Cigar Aficionado, though the founder of the magazine, Marvin Shanken, disputes that. "Not in any way, shape, or form," says Shanken, who recalls Solomon vaguely as a "nice guy" who did some product licensing long after the magazine was established, deals that were "relatively unsuccessful."

After Solomon left Applause in 1995, he struggled at times, both personally and professionally. His marketing firm—initially at least—was a drain on his assets. He launched an auto-leasing business, which failed in 1999. His second marriage was falling apart. In May 1996, Solomon approached his estranged wife at their daughter's volleyball match and "stomped hard on my foot," according to Leigh Solomon's battery report. "A few minutes later he violently wrenched my hair and told me he knew exactly how O.J. felt, and why he did what he had to do." That led to an emergency protective order. The couple divorced in 1998, the same year Solomon placed "virtually all his money" in a "small, nondiversified portfolio of the riskiest stocks" that "plummeted" in the spring of 2000 and was "liquidated at minimal value," according to a suit Solomon filed against his investment advisor. That case was still awaiting trial at the time of Solomon's death.

Then, in 2001, Solomon made a dramatic reentry into the toy business. He found out that Applause was on the brink of bankruptcy and arranged to rescue it, reinstalling himself as chairman and CEO (with backing from Prudential Insurance; Solomon put up no money). "The money was wired about an hour ago," he told employees in the company cafeteria in March 2001, according to an account in the Daily News. "The documents have been signed, and it's our company." He basked in a standing ovation.

But the toy business had changed dramatically during the years Solomon was away, and not to his benefit. The days when you could snag a license for a reasonable advance and slowly feed product into the market until you knew you had a hit were gone. Movie characters now ruled (Toy Story and The Lion King had been huge for Applause in the late 1990s), but licensees lived and died by the box office, and they had to place massive bets on movies that might be popular for weeks instead of months. Moreover, big-box retailers such as Wal-Mart were going directly to the licensors and manufacturers, thereby squeezing margins for the middlemen and redefining the economics of the industry.

According to his former associates, Solomon was working on a two-part rescue plan. First, to refocus Applause on its roots as a supplier to gift shops and specialty stores. And second, to free Applause from the tyranny of the licensors by developing its own characters. He thought he had found a way to do both with Dream Pets, a vintage plush line that had been popular in the 1960s and '70s (though dormant ever since) and had come to Applause in the merger with Dakin. Solomon saw Dream Pets as the basis for a "whole new kind of company," says Gerard Casale, a turnaround specialist whom Solomon hired this past May. "He liked the idea of exploiting intellectual property and owning it."

When dream pets got an enthusiastic response from attendees at the New York Toy Fair early this year, Solomon took off running. "His instinct told him, 'Okay, I've seen this before,'" says Casale. "'This is bigger than Smurfs, bigger than Beanie Babies, bigger than anything I've ever been a part of. I'm going to double-down my bet.'" Jim Taylor, a spokesman for Cracker Barrel Old Country Stores, remembers the day in March that Solomon visited the company in Lebanon, Tenn., spilled a dozen Dream Pets on a table, and, without notes, brought each one to life with vivid biographical sketches. Cracker Barrel, with more than 500 stores in 41 states, signed on.

Today Taylor won't say how many Dream Pets Cracker Barrel has sold, only that they "did not meet our expectations." Unfortunately, that was the case almost everywhere Dream Pets were sold. "The marketplace looked like it was going to absorb a hell of a lot of them," says Steven Sheiner, a founder of MP3.com and the last of several executives to spin through what became a revolving door at Applause, "but consumers weren't buying." Which should have come as no great shock to anyone, least of all a veteran like Solomon. The line on Beanie Babies is that they were an overnight sensation, but it was three years before that night arrived. Toys often take time to catch on, but time was running out at Applause.

In June the company lost its Disney licenses, a move portrayed cheerily in a company press release ("Goodbye, Disney!") but clearly a debacle, and the result, according to Disney, of Applause's failure to obtain a letter of credit from its bankers. "The sure-fire way for disaster is to live or die on one product or license," Solomon told California CEO magazine in 2002. Two years later that was precisely the situation he was in.

Solomon had always been an impetuous boss—he once hired a wheelchair-bound street artist on the spot because he liked his drawings and once fired an employee who was away on vacation. Both were expressions of a powerful entrepreneurial will that by the end had lost its bearings. "By the time I met him he shouldn't have been CEO of anything," says Sheiner. And Solomon knew it. More than once he complained to Casale, "My pilot light is out."

The week before he died, Solomon sent a surprise e-mail to his sister (and former personal assistant), Jeanette Socha. They had not seen or spoken to each other for two years. "It was a lot of things that drove us apart," says Socha: Solomon's third marriage, to a former employee, which lasted only one year (no relatives were invited to the wedding); his mood swings ("If something wasn't good in his life, he would holler at me," says Socha. "Then 30 minutes later he'd open the door and say, 'What are we doing for dinner?'"); and his recent struggles with alcohol and prescription drugs. (A toxicology exam at the time of Solomon's death detected painkillers and antidepressants in his bloodstream.)

But now Solomon was reaching out. "He told me he needed a big sister," Socha says. "I told him I was here." On a Tuesday in August she went to see him at his office. "We hugged, we kissed, we cried," she says. "We told each other how much we missed each other." Socha was shocked at his physical appearance. Formerly a dedicated bodybuilder, "he had lost a lot of weight, and he looked tired," she says. Socha invited Solomon to join her that weekend for a family wedding in Buffalo, but he told her no, he wasn't up for it. Three days later, 3,000 miles away, Socha got a late-night phone call. Her little brother was dead.

"You must fail, Sara," Solomon said to his oldest child one of the last times they spoke. "It's important that you fail. Because if you don't let yourself down every once in a while, all the little mistakes that were supposed to happen will build up, and you won't know what hit you."