Crowd Professionalism and Top Management Team Replacement

Crowdfunding literature has mainly focused on the financial or innovation performance of crowd-backed startups, while the crowd impact on startups' organizational design remains underexplored. Drawing from the literature on collective intelligence of the crowd, we hypothesize that the professionalism of the crowd attracted during crowdfunding campaigns influences organizational changes within startups. Using a unique dataset of equity-crowdfunded Italian startups, we employ social network analysis to characterize the professionalism of the crowd and investigate its correlation with organizational changes, focusing on top management team (TMT) dynamics. Our empirical analysis reveals that startups attracting a more professional crowd are more likely to change TMT members but less likely to replace the CEO. These findings contribute to understanding the nuanced effects of equity crowdfunding on startup organizational dynamics and challenge the notion that crowdfunding lacks post-campaign treatment effects.