By Anthony Ramirez REPORTER ASSOCIATE Julianne Slovak

(FORTUNE Magazine) – FOREIGN AFFAIRS OF A VENTURE CAPITALIST Peter Brooke spent sleepless nights building TA Associates of Boston into the biggest U.S. venture capital firm. Now this driven man travels the world over for a new international company, doing deals that ''rip my gut out.'' Says he: ''It's not easy out there.'' PETER BROOKE, venture capitalist, is a worrier. He worries about deals. He worries about the people behind the deals. Does the entrepreneur have what it takes? Did Brooke give him enough money? Or, worse, too much? Brooke telephones compulsively. He tugs at his graying brown hair. He chews on pens and pencils. He twists paper clips and digs them into the arms of chairs; he riddled one chair so full of holes that it had to be thrown out. Worry, worry, worry. Over 19 years and more than 200 deals, Brooke has worried the firm he founded, TA Associates of Boston, into the biggest venture capital firm in the U.S. In the past two years Brooke has worried his most recent venture, Advent International, into the biggest international venture capital operation in the world. Between them the two firms have $1.3 billion under management and a generous supply of the shrewd intelligence and restless urgency of Peter Brooke. Despite his elegant pin stripes, Brooke, 57, resembles a puckish schoolboy made pleasingly plump by adult success. As a young banker in Boston three decades ago, he developed a knack for lending to small high-tech companies that became the favorite parking places for venture capitalists' money. Within five years he had abandoned the staid world of banking for the precarious thrills of venture capital. Although he made his name -- and his fortune, estimated at $10 million to $20 million -- backing U.S. companies, he has spent years evangelically spreading the word about international venture capital. ''If I can feed somebody in China with a piece of technology that's come out of Great Britain, I think that's important,'' says Brooke. ''If I achieve that, I would hope to get paid for it.'' He envisions Advent, his tool for cracking the foreign market, as an international merchant bank. But unlike the banks of Florentine Italy that financed the movement of raw materials, Advent would finance the movement of technology and ideas. ''Peter is a pioneer in international venture capital,'' says Stanley Pratt, chairman of Venture Economics, a consulting firm that follows the industry. ''American business will be lost if it retreats to isolationism.'' Venture capitalists cajole money out of places with lots of it -- pension funds, university endowment funds, foundations -- and in return for an equity stake, plant money in places that have little or none, such as burgeoning companies with promising products or services. Six to ten years hence, a company may repay its venture capitalists by going public at a pretty price or by getting bought at a premium. Then again, the company may fail, leaving the venture capitalists with nothing but the experience. Unlike bankers, who make many low-profit loans, venture capitalists seek bigger payoffs by putting their eggs in only a few baskets. The difference between a banker and a venture capitalist, says William P. Egan, who runs his own venture firm in Boston, is ''the difference between dating a girl and marrying her.'' Brooke has married well, backing successful companies not only in the meccas of high tech -- California's Silicon Valley and Boston's Route 128 -- but in places like Minnetonka, Minnesota, and Marietta, Georgia. He or his associates were early supporters of Biogen and Tandon. TA invested $1.7 million in Tandon between 1977 and 1980. It sold out for $77 million in 1982 and 1983. The firm sold its $171,000 investment in Biogen for $10.5 million. BROOKE IS NOT a hands-on manager. He rarely gives clients specific advice on running their operations, preferring instead to fund entrepreneurs with strong business and technical backgrounds and leave them alone. Says Brooke: ''The money man doesn't control nothin'. That guy going home every night with the technology in his head is the asset, and if he sits down on you, you're dead.'' But while Brooke may not interfere, he is not uninvolved. Reflecting on a recent deal, he says, in a comment that could apply to all of them, ''Does this rip my gut out? Yeah. Do I spend a lot of sleepless nights because of this? Yeah. It's not easy out there.'' One reason it's not easy is that Brooke demands so much of himself and others. Egan, who was instrumental in the Tandon deal when he worked for TA in the 1970s, recalls that on one transaction Brooke called him so often that Egan finally sputtered, ''Peter, leave me the frig alone!'' It wasn't anything in particular about the deal that caught Brooke's attention, recalls Egan. ''He just wanted it done.'' Such compulsiveness may be essential in Brooke's drive to ''internationalize'' venture capital. The problems are formidable. Rigid, bureaucratic corporations in such countries as West Germany, France, and Japan do not encourage independence and innovation among middle managers. Thus potential entrepreneurs, the raw material of venture capitalists, are scarce abroad. Even if a venture capitalist does hit it big, cashing in is difficult because the market for initial public offerings is small and mergers and acquisitions are much less frequent than in the U.S. ^ Still, Brooke believes the idea that venture capital is peculiarly American is, well, peculiar. Europe is changing, he says, albeit gradually. Confiscatory taxes are easing, and profit is no longer a dirty word. The success of venture capital in the U.S. set Continental financiers to thinking, Why not here? One-third of TA's $700 million comes from foreign firms such as Scottish Investment Trust Co. Ltd. and Siemens AG. Stock exchanges dominated by smaller, newer companies, similar to the U.S. over-the-counter market, have begun to emerge in Britain, Sweden, the Netherlands, and France. In Britain, the country most receptive to American-style venturing, 100 venture capital firms have over $1 billion to invest. Brooke intends to be in the thick of this action with Advent International. Advent, which turns two years old in February, is not a venture capital firm in the American sense, but rather a network of independent venture capital partnerships in 14 countries in Europe and Asia. Brooke is on the boards of all the member firms and has a great deal to say about the deals they strike. Over 90% of the $600 million Advent manages comes from outside the U.S. Most of the money is invested abroad as well, although one of Brooke's tasks is to help foreigners crack the American market. Computers link all the partners to each other and to Advent's Boston office, which functions as a central clearinghouse. Advent makes its money from the fees it charges for this service and, as does any venture firm, from capital gains on successful deals. As a private company, however, it refuses to divulge its earnings. Establishing Advent took 16 years, off and on, of Brooke's time. He remembers knocking on a lot of closed doors. ''My knuckles got pretty damned bruised,'' he says, recalling the years before 1981, when few foreign governments, companies, or financial institutions had any interest in venture capital. Staffing the Advent network was not easy either. In Singapore a flamboyant Filipino did not fit into the conservative business culture of the Chinese entrepreneurs there. ''Too much wine, women, and song,'' explains Brooke. And in Britain, Brooke went through several unsuccessful partners before settling on David Cooksey, a plain-spoken yachtsman and Oxford-trained metallurgist, who had directed one of the country's first leveraged buyouts in 1971. A publisher friend of Brooke's was sailing with Cooksey in a yacht race around Britain when Cooksey expressed interest in venture capital; Brooke's name came up. ''Cooksey has guts,'' says Brooke, who gave him a shot at running Advent's London operation, Advent Ltd. Cooksey put together Advent's biggest deal in 1985, when he organized a syndicate that invested $80 million in European Silicon Structures. ES2, as it is called, is a pan-European venture with headquarters in Munich and design facilities in London, Edinburgh, Paris, Milan, Stockholm, and Munich. The company produces specially tailored microchips -- the intelligent bits of sand that make computers work -- and will soon begin turning them out in the record time of four weeks. That is substantially faster than other custom chipmakers, who take from eight to sixteen weeks. The chip glut has been devastating for manufacturers worldwide, but Cooksey claims that ES2's quick production process will give it an edge. Sometimes it seems as if Brooke manages Advent out of an airplane. He spent about one-third of his time on the road last year, making two trips to Asia and five to Europe. On one recent jaunt he arrived in Tokyo on a Thursday to give a speech to a trade group and left Friday night for another talk in Vienna. ''In this job you're never poring over dusty old numbers,'' says Brooke. ''You're flying all over the goddamn world, finding a good piece of technology and some good management, and putting money into them, and watching some of them go up and some go down. That's exciting.'' Brooke's proselytizing may be impeccably timed. The U.S. market has been sluggish in recent years. According to Venture Economics, new venture capital money totaled $3 billion in 1986, down from a record $4.5 billion in 1983. Kevin Landry, who runs the day-to-day activities of TA Associates, adds that while it's unclear exactly how the new U.S. tax code will affect the venture capital business, the elimination of the investment tax credit will hurt the manufacturing companies venture capitalists back. Brooke's international perspective is fitting for the son of an immigrant. His father, Percy, ran away from home in Somerset, England, at 16. Unwilling to follow the family tradition of becoming a Presbyterian minister, Percy fled to the U.S., where he worked his way through Harvard College and Harvard Medical School as an auto mechanic and a night nurse at a mental institution. Percy sent his son to Phillips Exeter, an elite New Hampshire prep school, and to Harvard in 1948. But the younger Brooke's plan to become a historian clashed with his formidable father's desire to see him in medical school. ''I made all the damn sacrifice to come over here, to give you this wonderful education,'' Brooke recalls his father saying, ''and here you want to be some lousy damned teacher.'' Following a stormy debate, Brooke compromised, oddly, on continuing his studies at Harvard Business School. Says Brooke: ''The solution might not have been mine, but at least it wasn't his.'' At the business school he was miserable and so were his grades. He found the students and teachers anti- intellectual and the curriculum little better than that of a trade school. Life improved considerably during his last year, when he married Anne Russell, the daughter of a Boston insurance executive. Her first impression of Brooke was hardly auspicious. He had taken her to the Harvard-Yale baseball game, proceeded to drink too much with his friends, and acted boorishly. Contrite over his behavior, Brooke was a gentleman for the rest of the courtship. ''He turned out to be a very nice person,'' says Mrs. Brooke. AFTER A STINT in the Army, Brooke became a loan officer at First National Bank of Boston (now the Bank of Boston). The loss of the textile and shoe industries had devastated New England's economy in the 1950s. But when the Soviets launched Sputnik in 1957, Brooke and his boss, William Brown, recognized that to catch the Russians in space, Washington would need the intellectual capital of Boston's universities. Federal money soon poured into the city. Relying on old-fashioned shoe leather to find loan prospects, Brooke haunted industrial parks and university offices, leaving his business card everywhere. His idea was to give a few bucks to 100 companies, not a few hundred bucks to one company. Such an approach dismayed conservative Boston bankers because the companies Brooke backed had little or no credit history. But Brooke's strategy carried little risk. Each of his companies had a federal contract, and Washington, desperate to win the space race, often paid the contract even if the company failed to produce. In four years Brooke lent $10 million and lost a mere $15,000. It was precisely this scattershot approach that landed Brooke a Harvard physicist and computer entrepreneur named An Wang. Hearing that Wang needed a $25,000 loan, Brooke offered him $50,000 at low interest and with no requirement that Wang back the credit with his personal assets. Wang quickly accepted, the two men became fast friends, and Brooke is now a director of the $2.6-billion-a-year Wang Laboratories. In Wang, an immigrant Chinese scientist, Brooke saw a single-minded drive to succeed. He says: ''Dr. Wang simply never felt he was a minority. He acted like he was a white Anglo-Saxon Protestant and just went and did his thing with immense confidence, very quietly.'' Because of his success lending to high-tech companies, Brooke had become well known to the small ranks of 1960s venture capitalists. In 1961 he began working with the Phipps family's venture capital fund in New York. Eighteen months later he joined the Boston brokerage firm of Tucker Anthony & R.L. Day. Within five years his first $100,000 of investments had grown to $2.5 million. In 1968 Brooke established a venture capital subsidiary for Tucker Anthony called TA Associates. Then between 1975 and 1978, he and several colleagues bought out Tucker Anthony's interest in TA. In contrast to his let-a-hundred-flowers-bloom days as a banker, Brooke the venture capitalist makes careful background checks before throwing his money around. He calls an entrepreneur's customers, suppliers, and previous employers to determine whether he really wants to spend the next ten years in that person's company. ''Before I met Peter,'' says Jean Deleage, a San Francisco venture capitalist trained by Brooke, ''I didn't know being a venture capitalist meant making so many phone calls, sometimes 50 to 100 on one deal. But my failures have often been tied to not making enough calls.'' Brooke tries to relax by gardening, skiing, and playing paddle tennis. He and his wife recently sold the frame house they built 25 years ago in Concord, Massachusetts, and bought a 1763 colonial nearby. They collect the paintings of 17th-century Dutch masters. Although they could clearly afford a van Ruisdael, Brooke says he prefers little-known but well-crafted works, much like the companies he backs. Buying a famous painting, he says, ''just wouldn't be any fun.'' Indeed, for a wealthy venture capitalist, Brooke's lifestyle is surprisingly simple. The guru of high tech has nothing in his home more complicated than a television and a stereo. And, says his wife, ''if we had a car phone we'd be the laughing stock of the community.'' The Brookes' three sons are grown. Sam, 28, is a graduate student in architecture at Syracuse University; Peter, 25, studies art at the Maryland Institute of Art; John, 24, is learning the venture capital business at Brooke's office. And how has Brooke adapted to the empty nest? He just brings more work home. ''I'd like to live another 100 years so I can get everything done that needs to be done,'' he says. Hurry, hurry, hurry.