2.b Be independent contractor. Carefully work on side-biz on your own time. Have good documentation and git-log in case someone at the client ends up caring when you worked on it (zero risk if it's not core biz for them and they aren't assholes). Don't tell anyone what you're working. Don't use proprietary data in your product. Profit
Again, every situation is different. But the benefit of bringing the client in is that they can act as your first reference client (the hardest to get), and that it's not job+sidebusiness, but a hybrid so your time is more efficiently spent.
