If you want to be upfront with the founders, go and clearly explain why you're leaving. There is a good chance that they will try to get you to stay by promising all sorts of changes, extra compensation, stock options, trying to guilt you to stay by saying the company goes down without you, etc.
Don't listen to them.
1. Changing something now is too late (and usually too little)
2. Extra comp sounds very nice but think about what you're trading for it: Your time and mental health. For me this doesn't sound a good deal.
3. Stock options: Same as above, but worse because that's something extremely vague which depends on many things going well and also (usually) ties you there for a few years.
4. Using guilt to make you stay: Let's make a couple of things clear: How the company stays afloat is not your problem. You are not the one who decided to open a company to do X while you had no idea, you are not the one who hired the toxic TL, you have no responsibility on the company's welfare. Most people are very, very interchangeable in a company. There are also a few special people who are not easy to replace. In either case, guess whose problem it is :)
You asked in the beginning as to whether your career is salvageable, and then you went on to describe all the steps you took to manage to get a prototype of X. I think that at the very minimum you learned a lot of stuff throughout this process. You also have the experience of how it is to work in a toxic environment. These things make you grow, both technically and as a person.
There are many companies that want to hire people in our tech bubble. For now take some time to yourself and don't worry too much.