Conflicts of Interest in Personal Investments

John is a financial analyst working for a large investment firm. He has recently been approached by a friend to invest in a startup company that the friend is launching. John is excited about the prospect but must consider the potential ethical implications of his investment. As a CFA charterholder, he is aware that he has a responsibility to maintain the highest level of professionalism.

When evaluating whether to invest in his friend's startup, John ponders the possibility of conflicts of interest. He knows he must adhere to the CFA Institute's Code of Ethics and Standards of Professional Conduct. How should John approach this situation?