Agreed. If this is a "I have a signed contract that will give me $Xk next month, if I can just make it to then" situation, sure, go for it. Otherwise, it's (almost definitely) just pissing away someone's money. There's always another way: get a job or freelance for a while and work on the startup on the side, take on funding, whatever.
This makes sense, but I can definitely see how I could get caught up thinking that with just "a few more" months I could get something to happen. By default, don't you have to ignore some data in a startup that says your failing and push on?
Otherwise you'd stop at square 0. I know there is a continuum of bullshitting yourself involved there, but it's certainly a grey area.
Seems like a mentor would be helpful in this kind of situation. I'm envisioning someone who's gone through success and failure, who isn't so emotionally connected with your project, who you can trust with the details even if they aren't flattering or optimistic, and who can help you make some of those judgement calls that get cloudy when you're right in the middle of something. A person like that is hard to find, but I think it's worth looking for.
