How to buy a killer .com domain

If the startup owner gets control, they can decide to stop paying, and the original domain owner has to sue for their money.

If the original domain owner keeps control, and the startup does well, they can be held to ransom by the domain owner threatening to redirect the domain.

Of course in theory all of this can be prevented through contracts, but the prospect of having to use the (international) court system to enforce one's rights is not an attractive one for either side. Startups often run out of money, and domainers like to spot an opportunity, so there's just too much risk.

As an aside, names aren't actually that important, so long as you can own your namespace. Flickr? Facebook? Craigslist? These are all pretty bad names, but it didn't seem to matter.

1) You're relying on the current domain name holder to be convinced by your option pitch and not just playing stubborn and getting paid upfront. The kind of person that's a domain squatter to have an interesting domain in the first place is going to be the stubborn sort looking to make bank upfront.

2) You can't just 'lease' the domain name as suggested and build up a company around it if you don't own it outright (i.e. be the admin/technical contact/owner. Again, if you're dealing with the kind of sleezeball that squats domain names, you can't leave them the option of taking back their domain name.