#CoffeeAndCapital: Q&A with MentorTech Ventures’ Brett Topche

Following a tradition that started in 2011, a member of the venture capital community shared their insights with local startup founders this Tuesday during Coffee & Capital, a monthly gathering for the startup community hosted by the University City Science Center with sponsorship from Duane Morris.
In this edition, MentorTech Ventures Managing Director Brett Topche took on issues like mistakes during pitches, the city’s advantage over other cities for startups and the national perception of the Philadelphia tech community. The investor answered questions from a group of 15 startup founders at Quorum’s main meeting room.
Topche, a venture capitalist since 2002, explained his firm’s focus on investing in initiatives linked to the University of Pennsylvania, and admits the Philadelphia market is tougher than other places in the U.S. to achieve that first round of funding.
Here’s a recap of what was said.
What do Philly investors want to see in a company before investing?
In Philly the bar is set higher. Angels look for a bit more revenue traction before they make their investments. They usually say: “Go and sell a little bit before you ask us for money,” Topche said. But it’s not a specific number: it’s more about pace of growth.
What are the most common mistakes companies make when pitching their company to investors?
The No. 1 mistake is not being honest. Anything slightly dishonest is a conversation-ender. When we write a check, we have to trust the CEO with the investors’ money. Another one is every VC’s favorite: the ‘We have no competition’ line, which is the biggest lie. There’s a lot of lies that get told and all of them will torpedo a deal, Topche said.

Key way to lose @BrettTopche's attention as a startup: dishonesty. "Anything slightly dishonest is a conversation-ender" #CoffeeAndCapital

— Technical.ly (@Technical_ly) May 17, 2016

Why should companies develop their ideas in Philly?
Philly has a lot of advantages. The cost of living in Philly is lower, and you can raise a company cheaper, and go a longer distance with an investment. It also depends on the type of company and who you’re trying to sell to. Here in Philly we have healthcare organizations actively looking for startups, and an active city government. In the end you have to figure out what’s right for your company.
What do you look for in a pitch?
A good pitch feels like going to a play, Topche said. There has to be a problem to solve. To prove your startup’s chance for success, always be able to answer: Why you and why now? What’s different today about what you’re doing? Why can you provide insight?

"To prove your startup's chance for success, always be able to answer: Why you? and Why now?" –@BrettTopche #CoffeeAndCapital

— Quorum (@Quorum_Sc) May 17, 2016

Should local companies go outside of Philly to seek funding?
Absolutely. Go to New York, Boston, New Jersey. There’s great investors in Philadelphia, but don’t let where you are become an obstacle. Wherever you are, there will be challenges.
Do you feel the word is out on what’s going on with tech in Philly?
Not as much as it could be, but it’s more than it used to be. A lot of people’s mental image of Philly is still Rocky running through the Italian Market with trash cans on fire, Topche said. We’re doing a better job but there’s more to do.