Earlier this week Return Path announced that it has acquired Netcreations. As a result of this merger, Return Path now has over 1,500 U.S. marketers as clients, 500 top web sites and ISPs as data partners, 650 channel partners, and a registered user base of 41 million active consumers. Both Matt Blumberg (Return Path CEO) and Fred Wilson (Return Path board member, managing director of Union Square Ventures) have written blogs on the deal. Rather than repeat what they’ve said (beyond – of course – congratulating both the Return Path and Netcreations teams), I’d like to talk about two key events that have occured in the Return Path’s history as a way to illustrate how acquisitions can play a key part in the creation of a startup.

I’m up in Alaska and have been sucking down books. Following are five flyby reviews for those of you with different tastes. Chirunning – Good book on combining T’ai Chi and Running. If you are a long distance runner, it’s worth a look to explore some of the concepts the author talks about. I used some of it on my run today and it felt logical. Triumph over Turbulence – Awesome entrepreneurial autobiography of Jim Magoffin – the founder of Markair – one of Alaska’s original airlines.

My wife Amy sent me the following Voltaire quote (via A Word A Day). It is forbidden to kill; therefore all murderers are punished unless they kill in large numbers and to the sound of trumpets. Something to chew on…

Rally Software – which we funded with Boulder Ventures in October 2003 – just shipped their first product. Nine months from startup funding to v1 – not bad! Rally provides an on-demand subscription service for Agile software development. I’ve written a little about Agile software development in the past – we’re finding many of our software companies are adopting various Agile development approaches. The “on-demand subscription service” is a key attribute of Rally’s product family – rather than heavy upfront licensing fees for software development tools, a customer can quickly and cost-effectively begin using Rally’s products.

NewsGator announced our investment last week. I received a number of nice notes from folks in the RSS world. I also received a bunch of questions about why we invested, how the process worked, whether we were going to do other RSS investments, and where NewsGator is going now that we’ve made the investment. Suffice it to say that these are all relevant and good questions and in true blog fashion, rather than send individual emails answering them, I’m going to try to address some of the questions here as openly and transparently as I can to help anyone that is interested understand how and why this investment happened.

I’ve looked at thousands (tens of thousands?) presentations pitching new businesses since the mid 1990’s. The vast majority of them suck. Unfortunately, it’s not Powerpoint’s fault (no – it wouldn’t be better if Freelance has become the standard). It’s the content creators fault. Edward Tufte – a master of The Visual Display of Quantitative Information, thinks Powerpoint is evil and corrupts absolutely. Blogs like Beyond Bullets help reduce the corruption, but given that I’m trying to get a very specific set of information in a short period of time (usually 30 – 60 minutes), more specificity about what I think is “good” is probably helpful.

Every now and then, a VC runs across an entrepreneur that has enormous vision, the mental agility to tune his idea to the market reality, and the chutzpah to pull it off. Randy Adams from AuctionDrop is one such guy. I met Randy for the first time when he came in one Monday to our partners meeting to pitch us on the idea for AuctionDrop. At the time he had a average looking powerpoint presentation that pitched a big idea – a national chain of drop off centers for eBay. The premise was that it’s a pain in the ass for the average Joe to sell something on eBay, that people would pay to have someone else do all the work for them, and that eBay would embrace this as one of their continued growth constraints is “supply of goods”.

Amy finished The Kite Runner the other day and immediately called me on my cell phone and said “I just read the best first novel that I’ve read so far this year.” NPR’s Susan Stamberg had a great piece on summer reading and first novels this morning and – as Amy has been working on her first novel – she reads a lot of them. So – when Amy says “this one is the best”, I immediately put it on the top of my reading pile.

When Raj Bhargava came up with the idea for Quova in 1999, one of his initial examples was that law enforcement would eventually focus on the Internet as a way to track bad guys that did bad things. Quova has had good success in the government marketplace and today announced that it was partnering with a company called Forensic Explorers to launch a new product called GeoLookup. Forensic Explorers NetWitness product models what users do with computer networks. Quova’s GeoPoint software instantly determines the real-world geographic location of a web site visitor. The combination enables NetWitness to incorporate real-time geolocation into their product – immediately helping identify the geographic location of an Internet attack or suspect based on their IP address.