[AstralStorm]

How do you know that it will ever produce returns?

Valuations are made out of belief (whole cloth).

The requirement is not a must, but you should take into account startup's burn rate over funding, which should eventually turn into burn rate over revenue. (without taking extra funding into account)

So, a startup that would have a huge burn rate should be much less valuable, as you're liable to lose money both short and long term. Same as with the bets, taking large bets with long timeframes is more liable to turn you bankrupt (both VC and startup owner) than taking small bets often, since you can back out at any given time. (I'm not talking about motivation, that's a separate thing.)

However, markets are not rational, so startups with high burn rate are considered very valuable for some reason.