Most of the times, upgrades are quite safe.
Unfortunately, you can never be 100% sure that everything is going to go well.
So I suggest you do what everyone does when an upgrade is imminent: backup.
Get an external HDD or any other kind of storage (network file server...), backup all your necessary files (including configuration files for running servers like apache, samba, etc) and then proceed with the upgrade.
Update: If Ubuntu Server is an image running on a VMware Workstation, why don't you just clone/backup this image and then do the upgrade?
You'll have to run:
More info can be found here
After the upgrade, the screen would go black with a blinking cursor.
We discussed the issue and found out that grub entries had
splash vt.handoff=7 appended although there was no GUI installed.
We then tried to edit the grub entries and delete the above parameters, which worked.
So we then edited
/etc/default/grub and made
Saved the file, issued a
sudo update-grub in order to update the grub menu entries and the problem was solved.