On determining whether the team really needs resources...

It is generally hard to determine when the team needs more people.  But the decision making can be eased with two step evaluation:

1) what do you want to get done and do you have the right capabilities in the team to get that done.  If not - or if the team is being built from scratch, decision is easier.

2) the team has the capabilities, but bandwidth is short.  In this case, it is best to implement performance metrics and then assess whether bandwidth is really short.  And even in this, it is important to pressure test and check for automation options before throwing people.  Startups usually suffer with the mentality of throwing people at the problem.

For eg. in an invoice processing team, if they were processing 100 invoices earlier, and now they are processing 300 - great, its indicative of bandwidth shortage.  but the question should be, can we get some system to do the processing, rather than throw people at the problem.