I have had a similar experience failing a really great investor, and I am sorry to hear that your opportunity is not working out. I see from your profile that

I have had a similar experience failing a really great investor, and I am sorry to hear that your opportunity is not working out. I see from your profile that you are a serial entrepreneur, so I doubt that you need to hear from me that there will be other opportunities in the future. What I can tell you is that it is important to be as honest and forthright when the rocket crashes as you can. You may never work with that investor again. That doesn't mean that nothing has to come out of that relationship. It is important to keep your reputation, especially with regards to someone with a high profile. It is equally important to keep your reputation and relationship with your coworkers and employees. When my first startup went under, there was a lot of anger between me and my partner, who had left college to work with me. But we worked through it and fourteen years later I was a groomsman at his wedding. So, realize that things are going to suck and there is going to be anger, but if you stay straight with them, they will hate the failure instead of hating you. And you can share that hatred for the failure with them, if you don't internalize the failure as being a part of you. It's hard to do that, but it's necessary to some extent to keep following your dreams. There are roles other than founder which VCs need in their quiver. Failed founders are one of the best places for VCs to find technical knowledge, which can be important for them in vetting other opportunities. Since they have already worked with you, they have a good idea of how much you know and how much you don't. And they have seen failure before, and won't hold it against you unless you do something untoward when things come apart. Failure sucks, and failing a great opportunity sucks more. But I hope that you really don't regret taking the opportunity, even if it led to a failure. One thing is to ask yourself, if you didn't know if it would result in failure or success, would you take the opportunity again? If you would, then you don't truly regret taking that chance. If you do realize that your venture is failing, it is good to switch to 'failure management mode'. I did this about a year too late, and it cost me dearly (I still had a forlorn hope, I didn't take salary the last year to save on expenses, ended up living in my car, girl left me, lots of fun). Maybe for you, failure management may mean salvaging relationships, your love for what you do, and hope for the future. All that emotional stuff is the hardest part of what we do, and managing that for both you and your people is a very important part of winding down a failed venture.