[devinmontgomery]

It's more like:

VC: "I am going to buy these goods at $1,000 today because I expect to be able to sell them for $1,100 in one year".

How they arrive at the $1,100 is based on the amount of risk there is and the return they could get on a zero-risk investment.

Seriously, finance seemed like mumbo jumbo to me to too before I learned about it. But it's actually pretty interesting. This is the calculation for present value.