I don't think you have to sell your house. But in a startup, with at least 80% probability, you are going to be faced with a choice along the lines of "Do I sell my house to keep this thing running for another month, and hope it takes off? Or do I kill it now, and write off the last year and all the money I've already lost?"

Note: the 80% probability claim is based on my understanding of the probability of a startup failing.