How do they calculate the valuation, for a company that has been losing money for 6-7 years and will probably never turn a profit? Is the valuation the price a

How do they calculate the valuation, for a company that has been losing money for 6-7 years and will probably never turn a profit? Is the valuation the price at which VCs unload it without losing any money and hand it over to small 'investors' (suckers)?