It depends who you are. If you're an established software engineer with a name, sure. If you're a 22-year-old out of college, no chance. Most of us are between those extremes, of course, and generally realize at some point that we've moved into the with-leverage crowd. But nobody starts there.
I actually think it's best, as a general principle, not to work on side projects while employed. If the side project really is a side project (i.e. it's unrelated to your work and therefore something you justly own) you'll do a much better job of it if you work on it full-time. The side project and the day job usually both suffer if you try to serve two masters. But there are cases to which this principle doesn't apply (i.e. an iPhone app that doesn't take much time to build but becomes very popular) and it's for those that we need (in NY) better laws.
I actually think it's best, as a general principle, not to work on side projects while employed. If the side project really is a side project (i.e. it's unrelated to your work and therefore something you justly own) you'll do a much better job of it if you work on it full-time. The side project and the day job usually both suffer if you try to serve two masters. But there are cases to which this principle doesn't apply (i.e. an iPhone app that doesn't take much time to build but becomes very popular) and it's for those that we need (in NY) better laws.