I agree totally but i will add one more option based on this quote "I believe in our product, but I don't believe in our business model." If this is the case and assuming u have nailed a customer pain point down since its been 15 months, i would suggest that you leave and execute the same idea with the business model you believe will work. If you and the VC are on the same page and these guys don't have much tech experience then they are clearly failing to execute and no salary, health insurance, free lunch is going to make you happy. Since at the end, they are still driving you into a ditch. If no other VC's want to bite then scrap the idea.
Since you already are doing consulting on the side, i think you may be able to squeeze 3 months in on trying to get funding, just make every action Fast, Focused and Fundamental to your objectives. Godspeed!