Ethical Investment Decision-Making

James is a senior portfolio manager at an investment firm, and he is responsible for managing a client’s investment portfolio. Recently, he was approached by a friend who works at a startup company seeking investment. The friend's company is seeking substantial funding and has approached several investors. James believes the company has high growth potential, but he is aware that any relationship with this company must be carefully managed to avoid conflicts of interest.

Given his position, James has to make a decision about whether to consider investing in his friend's startup, while ensuring that he adheres to the CFA Institute's ethical guidelines.