Henry's new big gamble

Boston Red Sox principal owner John Henry knows something about taking a risk and backing it up with a staggering pile of money.

Henry's current big-ticket investments include famous Japanese pitcher Daisuke Matsuzaka , outfielder J.D. Drew, and the fountain of youth. That's portfolio diversification.

Henry's financial interest in life-extension research is actually an investment in Sirtris Pharmaceuticals Inc., a Cambridge company preparing to go public. Sirtris is using research that found a substance extracted from red wine could extend the lifespan of yeast, hoping to develop drugs for diabetes and other metabolic problems.

Sirtris was launched just three years ago. It got its early cash from the usual places, a roster of venture capital firms like Polaris Venture Partners. By the start of this year, Sirtris had raised $67 million in a series of four rounds of venture financing.

Then Sirtris went to the till one more time. It raised $35.9 million between Jan. 23 and Feb. 1, collecting some of the money from company executives and venture firms that had contributed to previous rounds. But the bulk of the cash, $20 million, came from the John W. Henry Trust . Another latecomer who kicked in an unspecified amount of money: Peter Lynch , the former Fidelity Magellan manager who sometimes makes personal investments in small, high-risk ventures.

One month later, on March 1, Sirtris filed registration papers for an initial public offering with the Securities and Exchange Commission.

There are two ways of looking at venture investing just prior to a company's IPO. Those shares could be dirt cheap or very expensive. It takes time to tell.

On one hand, those very late venture investors are buying shares just months ahead of public stockholders, presuming the IPO gets off the ground. The investment risk to each group can't be very different, but the price of the stock is another story. The venture investor will end up with shares at a much lower price.

On the other hand, late venture investors are paying a lot more for their equity than investors paid in earlier, riskier rounds of venture financing. They're invested whether the public offering goes off or not, sitting on very illiquid shares if the IPO market suddenly goes cold. Even if the public offering succeeds, venture investors are considered insiders who cannot sell whenever they choose. If the shares tank, public investors can get out at any time.

Now Henry owns about 10.4 percent of Sirtris stock, which makes him the company's third-largest shareholder. But he appears to have put up more money than any of the company's other venture investors.

Sirtris hopes to raise another $60 million with its IPO, but it isn't clear yet how much stock it is prepared to sell in return. Underwriters have not yet suggested a price range they hope to attract for the Sirtris offering.

John Henry's stock gamble will begin to play out through the baseball season . The Sirtris bet may not seem so big to someone willing to spend $100 million on one pitcher. But a $20 million private investment in a company pitching a $60 million IPO looks serious to me.

The Red Herring

Sirtris is just one of 11 Massachusetts companies in the current IPO pipeline. All our big venture firms have positions in the state's IPO candidates, including Polaris, Matrix Partners , Charles River Ventures , Highland Capital Partners, and Battery Ventures . Even famed venture investor Bob Davoli of Sigma Partners is in the game.

"This is the best tech IPO market we've seen in six years," says Ben Howe of America's Growth Capital. "We've got at least 10 to 20 local companies that will be public this year."

Getting a '90s flashback?

Steven Syre is a Globe columnist. He can be reached at syre@globe.com.