The "right move" if there even is one will likely depending on 1) where that other income stream comes from - W2 wages, investments, wholly-owned business profits, partnership profits, etc; 2) separately from 1, whether you have other forms of income coming in; 3) are you married and are they part owners? explicitly or via marital property? 4) is anything securing the bootstrapped business that might be affected by paper losses? And I'm sure half a dozen things I'm not thinking of because I'm not an attorney or accountant.
Even if you can generalize a lot of these, this seems like exactly the sort of thing that should be outsourced to professionals who do it every day rather than wasting cycles becoming an expert in the minutia of state and federal tax laws.
I agree that there's many factors that could affect the "right move" and those should likely be handled by someone qualified.
That said, I think the situation of someone bootstrapping from a job or from another business income (freelancing, agency, etc) would be common and similar enough for some general options and traps to avoid.
I myself have had to learn some very hard lessons on what to do and what not to do. Not because I didn't consult attorneys, tax attorneys, and tax advisors (I did), but the cost of their services have far exceeded the value I could have learned from some online resources. There's also a level of trust you have to put into the specialists to give you the right advice, and that too has been an expensive minefield at times.
Perhaps I'll be the one to write about my experiences here once I'm done going through them ;)
Even if you can generalize a lot of these, this seems like exactly the sort of thing that should be outsourced to professionals who do it every day rather than wasting cycles becoming an expert in the minutia of state and federal tax laws.