A production company in the music industry is a business that has at least enough money to pay for beats (instrumentals), studio time, mixing, mastering, and final release to Spotify, Amazon, Apple, and YouTube music. They might have a little pocket change left for music videos and marketing (or promotion) here and there but that is not usually the main goal.
The main objective is about shopping an artist to a major record company for both distribution and of course, establishing a record contract. As you can see, a production deal if done in all fairness results in purposefully laying down the foundation from which future investments that come via a record deal should easily be recoupable without too many doubts about success.