The reader mailbag is a regular feature for paying subscribers. You can submit questions here for future mailbags.

Behind the scenes, things at Newcomer are absolutely crazy.

We have a big announcement coming Tuesday.

Meanwhile, I’m going to launch a Newcomer podcast in early March. I’m lining up guests and making preparations for that.

Busy, busy. On to your questions.

How are the VCs thinking about operational support for their portfolio as returns are likely to compress (e.g. less money to go around)?

—An anonymous reader

Well, what else do VCs have to do right now other than support their existing portfolio.

Do you not feel supported?

Given that many VC firms were almost certainly counting on raising more new funds to bring in new management fees to pay their support staff, we will probably see cuts to those services from firms that are slowing their pace of fundraising.

Plus, the venture capitalists aren’t making as many new investments, so they can spend more time helping portfolio companies themselves.

There’s less pressure to offer portfolio company services right now given there’s less competition for deals in the first place.

So yes, I think it’s likely that we’ll see cuts in operational support.

I think there’s also an interesting question afoot as to which firms set aside reserves for their portfolio companies and which ones don’t.

This is when long-term reputations get built.

The founder-friendly VCs will set aside money to keep their existing investments alive through this downturn. And certainly we’re seeing that happen. In my interview with Bessemer’s Jeremy Levine, he warned that we could see a self-reinforcing cycle of investors setting aside reserves. The more each firm sees their rivals holding back funds, the more money a firm needs to hold back for their own portfolio companies.

Of course, it can be hard to decide which portfolio companies are good long-term bets that just need a bridge to a better funding environment and which ones are never going to be able to raise the amount of money they need to see their vision through.

The ruthless VCs will cut their losses and refuse to put good money after bad. How many venture capital dollars should be wasted on a mistake?

I’m not making a moral judgment about either strategy. Much of the time, putting more money in a company that can’t find support from outside investors is just kicking the can down the round.

There has obviously been a decline in the $ value and # of late stage deals, however, data suggests that there is still reasonable momentum in Seed / Series A rounds.

What do you think is the biggest factor driving that in the current market?

I have heard reasons from industry dry powder reserves to these early-stage businesses not needing to worry about the current macroeconomic headwinds. It would be great to hear your take!

—Ned R. from Australia