Introduction

Two rival startups chose to merge instead of fight. This story shows how that risky bet actually saved both companies.

What's the problem it solves?

Crossbeam and Reveal were splitting the same network market in half.
Both were burning a lot of cash, growing slower than they should, and confusing customers who had to live in two half-useful products.

The merger was designed to solve four big problems:

• A split network in a category that needs one main platform
• High burn and slow sales
• Messy, weak pricing models
• Two teams building similar features instead of one strong roadmap

Quick Summary

Bob Moore, CEO of Crossbeam, saw that both his company and rival Reveal depended on strong network effects. With two big players in the same space, customers were forced to use both tools, and no one got full value. Crossbeam was near $10M ARR but had a very high burn multiple, long sales cycles, and weak pricing compared to the value they wanted to create. Reveal was doing well in Europe with strong logos, but they had similar pain.

Bob and Reveal CEO Simon met, clicked as people, and agreed that one shared network would be far better for customers and for the category. Their first talks stalled because of fresh funding, fuzzy valuations, and unclear targets. A year later, both were still growing fast but missing big goals and burning a lot of money. Customer feedback was loud and simple: please merge the networks. That pushed them back to the table.

They set four clear deal values: customer experience comes first, there is only one company, take the hardest pain early, and focus the story on the future. They agreed a 70/30 equity split, built a clean board, and stacked standard investor protections instead of weird terms. They handled "gun jumping" risk with clean teams and deal teams who could see just enough data but still run at arm's length until close. Day zero was all about message and structure: call it a merger, not an acquisition, show one org chart, make hard cuts, define one year goals, pick one product to win (Crossbeam backend with Reveal style in the front), and run a careful "crossboarding" plan to move Reveal customers over with support.

Within the first year, they migrated customers, shifted everyone to one contract base and one pricing model, rebuilt pricing around seats and data access, and accepted some short term friction to avoid long term mess. They even cut most of the C suite and handed more power to strong mid level leaders and the founders themselves. The result: ARR climbed past $20M toward $25M, burn dropped, NRR rose from about 90 percent to around 105 percent, culture scores improved, and the roadmap finally pointed fully at the future instead of clean up work.

Key Takeaways

• Mergers can fix core market physics when network effects are split, not just add revenue on top.
• Founder alignment and ego control are non negotiable if you want the deal to work for customers and teams.
• Clear deal values (customer first, one company, frontload pain, future focus) help break ties on hard calls.
• A simple, data backed equity split can save months of pointless fighting and help close the deal.
• Treat legal close and day zero as separate missions: first survive the deal, then win the story and the org.
• Pick one main product platform and accept that one codebase will be thrown away for the greater good.
• Rename "migration" to something that signals help and value (like crossboarding) and actually staff it that way.
• Use the merger as a reset point to rebuild pricing on first principles and link it tightly to customer outcomes.
• Be ready to rebuild the leadership team for the new reality, not protect roles hired for a past era.
• Success is not just closing the deal but hitting clear one year targets on ARR, burn, culture, product, and focus.

What to do

• If you are in a network effect market, map how many customers sit across you and your rivals and where value is split.
• Ask honestly: would customers be much better off if there were just one main platform? If yes, explore the hard option.
• Before talks get serious, write 3 to 5 deal values with your counterpart and rank them by importance. Use them as rules.
• When modeling terms, start from simple data points (ARR, network size, last round values) and pick a clear split.
• Plan for clean teams and deal teams early so you can share what you need without acting like one company too soon.
• Design day zero: the story, the word choice (merger vs acquisition), the org chart, and the concrete one year goals.
• Choose one product to be the base platform and accept painful tech cuts now instead of building a messy blend.
• Create a named, structured customer move plan with playbooks, support touchpoints, and clear success metrics.
• Use the merger to fix pricing: tie it to how customers see value (seats, data access, usage) instead of old tiers.
• Review your C suite and top roles as if you were hiring from scratch for the merged company and current market, not the past.

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