If Vonage were truly in the VoIP business for the long haul, it might have spent less of its VC stash on marketing and more on research and development (or maybe even acquisitions) of interesting IP-based applications that would have let Vonage move away from its initial strategy of offering just low-cost telephone replacement services.
From here, an IPO looks dubious since it's going to take a lot more than the $600 million Vonage is reportedly seeking to successfully battle the SBCs and Verizons of the world, who now have their regulatory lapdogs taking big bites out of Vonage's market lead. Just ask Covad or Northpoint or Rhythms how long VC money lasts against an RBOC determined to drum you out of business.
However Vonage's independence story ends, it should always be remembered that the company was one of the leaders in showing the world that we didn't have to accept the Ma Bell method of voice-call pricing. For helping to shatter that myth forever, Vonage CEO Jeffrey Citron and his co-workers (and investors) certainly deserve some reward, even if it stops short of a NASDAQ symbol.