I’d recommend a hidden category. 

We’re taking a group-first approach (rather than community categories), but because there’s no way to be notified of new applications to a private group, you’d have to check the group regularly or risk them sitting in pending for awhile. 

Also, users need to join a group before they can post there from the Create Topic button in the mega menu navigation, as opposed to being able to post directly to a community category as long as they have permission. 

The only upside of a group is if you want them to see the roster of who else in the group. 

One downside to a group that you should be aware of is that there aren’t any categories in groups. So you aren’t able to categorize any of the conversations - it’s just one big feed. It might work fine for your needs, but just be aware! 

We’re currently doing both. I’ve got a private forum with several categories for employee/partner conversations (hidden from customers). 

We’ve also got groups set up for specific groups of customers. None of our groups have really taken off, honestly. I think it’s because you have to make a point to go there, outside of the main community. 

But there’s definitely value to both! 

Sounds like categories are the way to go. Thanks @DannyPancratz and @Kgastaldo 

in your communities do you then manage access to a category via a custom role?

Yes, I assign our customers, partners, and employees custom roles. It’s a bit of admin work, but you can add it to your SSO if you have one set up (we only have one set up for employees). 

For the time being I’m also recommending using categories, but in the long run inSided will (hopefully) improve the group functionality so that at some point in the future everything that revolves around a limited group of users with the same interest (or working on the same project) should be better situated in the groups.