(De)centralized governance and the value of platform-based new ventures: The moderating role of teams and transparency

Drawing on institutional and demand-side perspectives, we investigate performance implications of (de)centralized governance modes in platform-based new ventures, and the conditions under which (de)centralization generates more value. Using a sample of 1,431 Initial Coin Offerings (ICOs), a new source of entrepreneurial finance, we find that centralization of decision-making is positively associated with platforms' market value. Further, we consider how platform characteristics affect this relationship, finding that both the presence of an experienced Chief Technology Officer (CTO) and project transparency negatively moderate the positive relationship between centralization and market value. Thus, decentralized platforms need leaders with technical experience and project transparency to generate more value. Overall, this study provides a better understanding of the boundary conditions that increase the value of (de)centralized governance. This study investigates how different governance structures impact the market value of new blockchain-based ventures that conduct Initial Coin Offerings (ICOs). We explore the roles of centralized and decentralized decision-making and how these structures affect platform performance. Our findings show that centralized governance, where decision-making is concentrated, tends to increase a platform's market value. However, having an experienced Chief Technology Officer (CTO) and clear project transparency can reduce the reliance on centralization. This implies that decentralized platforms can also achieve high market value if they have transparent processes and skilled leaders who can manage the technical aspects. The primary implication for practice is that new blockchain platforms should focus on hiring experienced technical leaders and ensuring transparency in their projects to attract investors and customers.