If your strategy involves doing something that eliminates your upside potential, while leaving downside potential, then the strategy has negative expected value and is a bad strategy.
If nearly 100% of non-consulting startups go through bad times, but you've chosen the strategy of cutting your losses as soon as you run into bad times, it's fair to estimate that the eliminating the upside potential may have lowered the expected value for that strategy to below 0. Might as well go gamble or just do a fun hobby in that case.
Non-consulting tech startups are particularly rigged against using this strategy of cutting out as soon as things turn bad, because it's typical that founders are forced to take a big loss relative to their alternatives until the very end when the exit happens. The norm is for it to always be financially worse than the more stable alternatives, until eventually maybe it turns good at the end.
