Supplementary recommendation

That's a great question. Since you took the entrepreneurial endeavor on as a side project, I don't think you have as much pressure to legitimize it. But I'd say the best way is by letting the business speak for itself - in your resume and application, show that the business is legitimate by listing revenues, employee #s, etc. Though you might not have an official title, you can call yourself cofounder and list your roles/responsibilities and achievements. I am sure you'd have interesting leadership experiences from this company - perhaps one would make for a good essay? If the company's been successful and you've had a strong hand in that, that's all you need to show. If you're trying to make an unsuccessful/small side project look really big, that will be a problem. A supplementary rec from your partner is a great idea from schools that allow it. For others, focus on letting the business speak for itself through your resume, essays, interviews, etc. You could also ask your cofounder to agree on a title for you.

Good luck!
Mili