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From crowds to boards: the impact of equity crowdfunding on board size
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DOI：10.1007/s11187-026-01253-0.png)
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Abstract
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This study examines how equity crowdfunding (ECF) influences the board size of entrepreneurial firms. Using data on 602 ECF firms and a matched sample of 602 non-ECF firms, we find that ECF is associated with a significant increase in board size after the ECF campaign. This effect is particularly pronounced in firms without venture capital or private equity backing. The type of shareholder structure, i.e., whether investors hold shares directly or through a nominee, does not change the magnitude of the increase in board size. These findings contribute to entrepreneurial finance research by revealing how ECF affects governance design over time and how platform structures and professional investors moderate this process. Our results suggest that ECF increases governance complexity and makes subsequent board professionalization more likely. Entrepreneurs and policymakers should consider how different ECF models and institutional investors shape post-funding governance outcomes. Equity crowdfunding does not just raise money: it reshapes how start-ups are governed, often prompting firms to expand their boards. Drawing on a matched sample of over 600 U.K. firms, we find that board size increases significantly after an equity crowdfunding campaign, especially in firms without venture capital or private equity backing. Surprisingly, whether investors hold shares directly or through a nominee makes no difference to the extent of board expansion, suggesting that board expansion reflects a structural response to dispersed ownership and heightened visibility rather than investor pressure. For entrepreneurs, these findings highlight that equity crowdfunding triggers governance demands that go beyond the campaign itself, making early board planning essential. For policymakers, the results indicate that platform and investor structures shape post-campaign governance in ways that existing shareholder protection rules may not fully anticipate.
Keywords:
Equity crowdfunding
Corporate governance
Board of directors
Entrepreneurial firms
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