From Jim Flowers:

Anne Clelland, the founder of Handshake 2.0, asked me a really tough question.  "How," she asked, "can entrepreneurs know when it's time to give up and move on?"

How, indeed?  What if they stop too soon?

"Many of life's failures are people who did not realize how close they were to success when they gave up."
- Thomas A. Edison

What if they continue, for apparently valid, but faulty reasons?

"You got to know when to hold 'em, know when to fold 'em, know when to walk away, and know when to run."
- Kenny Rogers

Eileen Shapiro and Howard Stevenson, in Make Your Own Luck, provide a surprisingly practical method for deciding whether to continue a "bet" of any kind.  You can check out the relevant excerpt here.

The clever and diverse methods we all employ to make poor decisions are catalogued by Joseph T. Hallinan, in Why We Make Mistakes.

What these and other experts point out is a fundamental human condition.  How we feel colors what we think we know.  What we believe controls the knowledge available to us. 

If you question these assertions, check out the Ladder of Inference.  And, of course, no two people see a situation through the same eyes.

So - my less-than-definitive answer to Anne's tough question is this: when it's time to quit, you'll know it.

You may well be incapable of proving it, but you will certainly know it.  You will know it in a personal way, perhaps useful and convincing only to you; but you will know it nonetheless.

To put that into my favorite metaphorical context: MOXIE is the intersection of your Power to take action and the intensity of your Purpose.  When your MOXIE is exhausted, it is time to quit.

Jim Flowers is the executive director of VT KnowledgeWorks. He writes the top-rated blog for entrepreneurs, So you want to launch a business... VT KnowledgeWorks is a client of Handshake Media, Incorporated.