One of the things I like about American business processes is the merciless confessional process companies go through as they do an initial public offering. Vonage is stripping itself naked right now. Among the risk factors: It’s losing money at an increasing rate as it buys ads to gain marketshare – It’s got 1.6M users. It’s in violation of the E-911 regulation (which does not fit easily on VOIP providers). Vonage chairman and founder settled with the SEC over fraud accusations at his previous company; he will own 33% of the outstanding common stock. Plus, of course, Vonage could be wiped off the board if carriers are allowed to violate Net neutrality by charging more for Vonage’s VOIP bits than for their own. (There’s also stuff at the top of p, 20 about the dilution of common stock. Is that usual?)

Vonage is enabling its early customers to participate in the IPO, which is nice of them. I’m eligible, but won’t participate: I’m a happy Vonage customer but I almost never buy stocks. (I should perhaps note that a blog post from a couple of years ago about Vonage continues to attract comments about how awful Vonage’s customer service is. I personally have no complaints.) [Tags: vonage ipo voip net_neutrality]

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