I've worked in "co-op adjacent" styles all my life. We'd typically have 3 or 4 folk as owners, but with additional employees.
The key restriction I see is the difficulties in large-group decision making. 4, or 3 seems to work well, but more than that it seems to flounder.
Every decision comes with upsides and downsides. So risks have to be taken, but in large groups the most common option is "status quo". You see this play out all the time in large companies with big boards and deep management all the time. It ends up stagnating because there's always the "safe" option which means trailing behind.
Of course it can work. But it's not common.
In a truly cooperative everyone gets a say. And most people are risk adverse. Ultimately it tends to collapse under its own inaction as those who are accepting of more risk go elsewhere.
Electing top management is also a weak approach because it becomes very political and seldom elevates merit.
People have different goals, some want long term job security, some want short-term rewards, and so on. The more people you add the harder doing anything becomes.
In other words a cooperative succeeds when it has a very clear set of goals and ambitions and only accepts people who are tightly aligned with those. It's a very difficult structure to be successful at.