First, should you feel bad?
The reality is, stuff like this happens. A few key employees leave at the same time. It's not your fault. Companies which fail to plan for employees leaving end up hurting. But that's a management level problem for failing to plan.
Are you actively lying to your boss? Is your boss doing surveys to understand what employees want (and actually taking action)? Are you paid market rate or above? Is your manager good? Do you have a good work environment?
If the answers to these questions is "no" then it's clear your boss isn't doing what he can to keep you around.
Don't let yourself feel guilty because of your boss's negligence.
Be careful to avoid you and your friend commiserating and making things worse. A negative spirit can be pretty powerful. I have worked with someone before who could find great reasons to complain about everything - this person had a disproportionate impact on me disliking my situation. Be careful that you don't "talk up" how bad the situation is and then leave because of that.
What should you do?
Hopefully you have communicated at least some of your concerns with your boss previously. If that has happened, your boss will not be super surprised. Leaving unexpectedly, having voiced no concerns, will leave a much worse impression than having tried to reconcile them.
If you haven't talked with your boss, that alone will probably be a negative on your relationship. It won't destroy it, but it probably will hurt it some. In this situation, if you aren't being candid about your reasons for wanting to leave prior to resigning, I'd strongly avoid talking too much about why you are leaving in details. Something like, "I just don't think this is the best place for me and am excited about this other opportunity" can answer most questions.
People may press the "why did both of you leave?" but realistically you can't stop this question from happening. People love to speculate/gossip. Keeping it professional and not badmouthing the company (or them) is your best bet.
Because the company is so small, I am afraid the damage of two key workers leaving at once will be severe, if not catastrophic, since the business is already struggling.
A few thoughts here, too.
First, you can't prevent all the damage and you may not be able to even prevent most of it. A company losing 1/3 its employees is going to have problems, especially if they are the top employees as you say.
You can do a few things to help though. One possibility is to focus on preparing for getting hit by a bus. I asked that question for nearly the exact same reasons, I was part of a small team and was the sole technical contributor. Documenting your work, and documenting what your next steps are can be helpful. You can start doing this even now (and realistically it's helpful for your current work, too).
Next, if you have flexibility on your notice period, this may help to have a longer period. Some managers might say, "oh you took a new job? here's the door cya now" but others may appreciate a longer notice period.
Your mileage will vary based on whether this time is used effectively to transition or more to "do as much work as you can get in before you leave."
When talking with your new company, I suggest verifying they would have flexibility before offering a 4-week notice period to your current employer. The last thing you want is to have a 2-week notice period, offer 4 to your current employer, and be out of a job for that period (well, maybe this would actually be ideal, depends on the person I guess).