If the problems are quantifiable and people can be educated to see/solve them there is hope. You can be re-capture the start-up thrill and elan that made you all work hard and succeed. Failing this? Find a company that has solved these problems and who has the right people and sell out/merge with them.
This might mean some hard decisions to eliminate the obstructive people with separation shares and agreements to allow them to leave and not want to sue or otherwise harm the company.
Total failure wastes all you and the founder have done to date, so adapt to thrive...