It is a mining term and my dictionary defines it this way:

"GRUB-STAKE \'grub-,stak\ n: supplies or funds furnished a mining prospector in return for a share in his finds"

In other words if I were to go out and find a gold vein in a mountain side but not have the money to develop it into a profitable mine, I may come to you and you might "grubstake" me. That is, you would put up the cash and/or supplies and equipment in return for a share (usually quite large - like 50% or so) of the output of the mine. You would have then "grubstaked" me.