Basically the partner who was backing the deal has made it clear this was not something that came up in due diligence, but rather he was changing location. (i.e. physically moving across the world). When I asked if we could just push back the dates- he suggested he would rather wait until the next round. This is after a 40 day 'limbo period' where we thought the deal was on. Should I continue to pursue a deal with them?
The issue is, now I look somewhat foolish going back to other co-investors and explaining that we need to switch lead investor. Any advice welcomed, thank you.
Just be transparent and if you can, get a formal letter from that former partner about the situation. Things like that happen!
Wow, that's a bummer.
You should tell your other investors just what you said in your question: "Term sheet pulled because the partner backing the firm is going through structural changes and moving out of the area."
Then, I would work like the dickens to find another lead investor.
We can do a quick 15-minute call if you'd like.
All the best.