Honestly, this doesn't sound too bad for a worst case scenario story. This story probably holds true for any 5+ year old Valley company that has managed to survive.
reading it felt like the story left out quite a few details...i'm sure there was a good reason that they slowed down so much--one product with a staff of 50? c'mon...
"After Voltage shipped its first product -- email-security software -- in early 2004, its revenue jumped from $3 million to $9 million in 2005, says the CEO."
...
"Mr. Krishnamurthy says Voltage now has more than 400 customers and is generating cash, though it remains unprofitable."
$9MM in revenue, and you can't turn a profit?
This seems to be a case where the VC's ambitions are lessening the chance of the company succeeding. Maybe customers would be less concerned about the company going under if it was making a profit.