How to buy a grid

I’ve been following the drama surrounding AviWorlds much, much closer than I would have liked — because I keep getting emails from the folks involved, and also because it’s my job.

And I can honestly say that I don’t know who owns AviWorlds anymore, who runs it, and why people keep coming back to the grid.

But it occurs to me that grid buyers might not know what exactly they’re getting into when they buy a grid, so here is my due diligence check list.

If I missed anything — please let me know!

Also, this is not legal advice, but general suggestions about some thing specifics to grids, that your contract lawyer might not be aware of.

Buying a grid isn’t just a matter of getting all the logins and passwords.

(Photo Credit ell brown via Compfight cc)

(Photo Credit ell brown via Compfight cc)

Is there a terms of service?

Don’t buy a grid if it doesn’t have a terms of service that specifies that the users give permission for the grid to use their content even after the grid is sold.

The way copyright law works, as a rule of thumb, if someone creates something and gives it to you, you’re only allowed to use it for the initial purpose for which it was given. So, for example, if a writer sells you an article, then, by default, you’re only getting first publication rights. You don’t get the rights to put the article in an online archive, to distribute it to sister publications, or to turn it into a movie — the author keeps all those rights. If you want those rights, you need a contract that lists those specific rights.

So check to see whether the terms of service allows the original grid owner to transfer the rights to use the user-created content to a new owner.

Also, check to see whether the grid has a record of every user agreeing to those terms of service. So, for example, if the grid adds that clause to their terms of service a week before selling the grid, did all the users have time to agree to the change? Probably not.

Ask to see the list of users who have agreed to the latest version.

Are there any outstanding debts?

Does the grid owe any money to developers, creators, or hosting companies? Even if the former owner agrees to cover any outstanding money owed, that’s not going to help you any if your hosting provider cuts you off, or your developer quits, or your creators raise a big stink about your grid ripping them off.

Don’t take the grid owner’s word for it.

Check with the hosting company and all the other service and content providers.

If the previous owners aren’t forthcoming with all the contact information, that’s a big red flag right then and there.

Look at the vendor agreements

And while you’re on the phone with all the vendors, this is a good opportunity for you to find out whether they’ll stick with the grid after a change of ownership.

And if there’s any content involved, check that the agreement allows the transfer of rights to a new owner. You’d hate to lose the rights to your custom-build welcome region or website. Even if you plan to replace them with your own, you need to have something in place until the new one is ready.

Non-compete clause

A virtual world, at its heart, is little more than a collection of relationships. The technology and the content is nice, but they’re not where the real value lies.

If the grid was small, or its founder particularly charismatic, then there’s a good chance that the previous owners are intrinsic to many of those relationships — and where they go, the relationships might follow.

What will you do if they go off and start another grid, and the developers, creators, and residents who know and trust them all jump ship?

This is where a non-compete clause comes in. Make sure you have one in place even if the former owner agrees to stay on with the grid in some capacity. Otherwise, they can easily decide that they prefer to be a boss instead of an underlying, quit, and go start over from scratch.

A non-compete period doesn’t have to be unreasonably long, but you do want at least a few months for your staff, vendors, and residents to get used to you.

Account access

When tallying up a grid’s assets, it can be easy to overlook social media accounts.

Or, when transferring bank accounts, to forget about accounts with PayPal, other payment services, or credit cards.

 

But all those accounts have value in and of themselves — plus, someone could do serious damage to your grid’s reputation, infrastructure, and even finances if they gain unauthorized access.

Track down all of the following:

  • All email accounts connected to the grid, including customer service, billing, public relations, and any account used to log into other services, such as social media, PayPal or hosting. If any of these were personal emails, have the previous owners fix it right away.
  • Infrastructure accounts. Grid hosting, Website hosting, and domain name registrations should all be company accounts, not personal accounts, and connected to company email addresses instead of personal ones.
  • Financial accounts, including bank accounts, PayPal accounts, credit cards and loans all need to be identified and either transferred or replaced.
  • Social media accounts. Twitter, Facebook, LinkedIn, Google Plus need to be checked first. If the grid was using personal accounts to communicate with customers, you’ll have to resolve that problem before moving ahead with the sale. And don’t forget to check for grid-related groups, pages, and communities, as well as Pinterest boards, Reddit subforums, and forums on other networking sites such as the Avatar Social Network.
  • Any other accounts linked to any of the above. Is there an Elance account that’s directly linked to a company bank account, PayPal account or credit card? Amazon account? Kitely Market account? Ask to see transaction histories for all accounts and look for automatic or recurring payments.

Gut check

It’s easy to get caught up in the excitement of acquiring a new business.

And due diligence is a lot of hard work. You might be tempted to skip steps, or to take the seller’s word that everything is all set.

Don’t.

A five minute phone call could save you months of grief.

And don’t forget that it’s still early days in the development of the metaverse. There are still plenty of opportunities to start a grid fresh, and hosting providers who will set you up with everything you need at very little cost — and without any of the baggage of buying an existing grid.

maria@hypergridbusiness.com'

Maria Korolov

Maria Korolov is editor and publisher of Hypergrid Business. She has been a journalist for more than twenty years and has worked for the Chicago Tribune, Reuters, and Computerworld and has reported from over a dozen countries, including Russia and China.

  • Han Held

    “if you can’t spot the sucker in your first half-hour at the table, it’s you” …just as true regarding business as it is about poker.

  • AviWorlds

    Very true Hand Held. Very true indeed. 🙂

  • Talla Adam

    Quite a lot of discussion on this at G+ Opensim Virtual here…
    https://plus.google.com/106115943375300299121/posts/Pf3BpcV96Ej
    Get the latest in the saga.

    • AntiDrama

      Why is this drama being supported at opensim virtual?

      • In a way, I think the discussion is good as it demonstrates to anyone with any sense that it might not be such a great time to invest in that grid. On the other hand, its becoming so silly now I am beginning to wish the grid would just die and we can all move on. I don’t know what I would do if I were Talla, but I think she is doing her best to make sure people get the facts while trying to keep a lid on all the public nastyness.

        • Talla Adam

          Thank you Ozwell and I would add that OV is a large community of Opensim users who are free to express their views within reason. Grid owners and hosting companies are also free to promote their services and hosting deals just as they can do that here in Hypergrid Business. With that said, people’s views are their own and I or the moderators do not necessarily agree so it is mistaken to suggest we support the various dramas when they occur. And I can assure you I do take action if it gets out of hand. If people want to rant, okay so long as they keep the bad language down and don’t go too far in making accusations. It is difficult to know where to draw the line at times and I may sometimes let things go a bit. But with all said and done I think it is right and helpful to let people give both good and bad feedback about grids and services they may well be spending a lot of money on. There are always two sides to a story and it can get heated.

          In the present case of Aviworlds there has been a lot of agree and disagree between those involved in the sale of that grid, if you can call it a sale. Alex changes his mind so often it has naturally generated a lot of controversy expressed here and on other media quite apart from Google plus. But anyway, Opensim Virtual is a cross grid social network and news media channel where any member can post topics and comment. That wont change.

          • AviWorlds

            Talla if he did not pay anything and nothing was transfered to his name that SALE hasnt been finalised.

            The truth is that if you are BIAS enough to stay on the side of a person who is doing something wrong then there isnt much we can say about your character either can we?

            Right is right, wrong is wrong.

            A SALE as far as I am concerned had to be finalised. IT WASNT. In fact MIKE HART did not sign the final agreement and now he is doing what I was afraid he would do.

            His own words below.

            Mike Hart11:49 AM (30 minutes ago)

            to me

            Nothing is being deleted Alex. Because basically according to AviWorlds TOS I own it all. Just need to get rid of your name everywhere.

  • Susannah Avonside

    I just hope that it all gets sorted out and that I can again visit Mike’s wonderful racing circuit – I even set up a blam gate type connection to it, but then HG got turned off on AviWorlds, again.