Venture Capital Valuation of Startups

In venture capital investing, the valuation of a startup is a critical consideration when making investment decisions. Investors typically rely on various methods to determine the worth of a startup, particularly before it has generated significant revenue. One commonly discussed valuation method is known as the 'Discounted Cash Flow' (DCF) analysis. However, in the context of early-stage companies, there are unique challenges associated with the application of DCF.

What is the primary reason that venture capitalists often find DCF valuation less applicable for early-stage startups?