I think a good rule of thumb with technology in general is to build to your budget. If you are serious about your website and your online business then the only logical direction will be to look towards a dedicated server.
Even though you may save money by going with a VPS, you will most likely spend twice the amount you saved when your site outgrows the VPS and you are forced to migrate your site to a fully dedicated.
If you are running an ecommerce site of decent size, streaming any kind of media services, or hosting multiple domains, dedicated is the only way.

Good Luck