Working at a company where middle-management is incompetent is common. Particularly in startups where they promote from within or the leaders haven't seen good management before. That being said, if you aren't getting your best work done, it's probably best to leave.

That being said, regarding whether or not your startup is failing, its hard to know (even from the inside). But one thing that is important is whether the leaders of your company think they are failing. That is easier to notice and is a shittier experience than just if your company is failing but your leaders see a way out. If your leaders think they are going to die, the easiest way to know is when the free stuff gets taken away (swag, coffees, expensed lunches). The other is if projects keep getting killed and new ones that get promoted as the answer to all the problems ... sign that they don't know what they're doing.