Private (Quasi-VC) Investing on the Side?

With the fear of sounding ignorant to the basic rules of IBD compliance policies, to what extent is it viable to invest in a startup fundraising round (if you were able to finagle some shares, that is), e.g. if my friend is working at a series B or C startup and offers me to join in for a fundraising round. I'm currently working in a coverage group for the same industry, so I'm thinking that might raise a potential conflict of interest if I were to work on a deal for a company that would be seen as a competitor... have you guys heard of investment bankers participating in startup fundraising rounds as minority investors?

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