We have a team of around 10 developers working on a new product.
We have split this product into two team projects on Visual Studio Online. Developers can work on both
You should have both teams in the same team project. You c Dan create multiple teams that all exist within the same team project and get their own backlogs.
http://nakedalm.com/creating-nested-teams-visual-studio-alm/
Most of my customers have moved to a single team project and I have a simple rule:
"If you have assets that are related (with assets defined as code, people, or work items) then you should be in a single team project."
I just got done in London merging about 15 team projects into one so that the entire org can work together. This was 6 teams across about 12 products, all moved to one team project.
The only effective way to collaborate is within a single bucket of work.