Digital finance platforms are disrupting traditional financial entities (FEs). Yet, FEs increasingly invest in their ownership. We investigate whether FE ownership creates a “top-shelf blend” that enhances platform performance or a “sour mix” that undermines it. We integrate legitimacy theory and organizational identity theory to theorize an inverted U-shaped relationship between FE ownership and the performance of equity crowdfunding (ECF) platforms. A longitudinal analysis based on 306 ECF platforms demonstrates that FE ownership enhances performance up to a certain point, after which performance declines. The legitimacy of FEs owning ECF platforms moderates this relationship.
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