[makecheck]

Assuming your hands aren't too tied by legal agreements, I'd cut my losses and quit. Life is too short to put up with a bad workplace.

Also try to show as much loyalty as you can to the person that you hired, as they're apparently someone competent who was caught in the crossfire. Perhaps you can fit them in if you happen to start something new soon. Heck, maybe even that person would be a better co-founder for a new venture.