I see two issues with this approach: 1) You're relying on the current domain name holder to be convinced by your option pitch and not just playing stubborn and

I see two issues with this approach: 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.