It's a good idea to start early with IaC but one of the marks of a good engineer is knowing what tooling to use for each circumstance.
Your app might be a perfect fit for Terraform or it might not, I couldn't possibly comment. Given the info you've provided it seems excessive but it's hard to say for sure
Agree, if you're introducing it to a new team and don't have time to teach the tooling that could be problematic.
But being somewhat familiar with Terraform I would use it to launch a single EC2 instance. Because it's about as fast to do that as it would be for me to use the AWS Console.
It's not that I think Terraform is needed for that small of a project, it's that it adds no cost even for tiny projects.
You are right that size is not the best measure of suitability.
I would make the case that, even with 5 months of runway, you should invest in a solid foundation. Because if the company goes down, it does. Only a little bit earlier. if it doesn't, which is I assume the reasoning behind the company in the first place, getting the basics right now has a huge impact on runway and scalability later on.
It is (eventually, once you learn it) faster and more intuitive than bothering with the AWS console, and I often reference Terraform's own AWS resource documentation over the AWS docs since it usually has better information density.
Anyway, the issue is all beside the point, I think we realize that Terraform was used as a placeholder example. Another example might be setting up single sign on, Active Directory, and other things that are truly not necessary for a company of that scale.
The other part of this that if you've got a startup with 5 month runway and 10 employees, hiring an Infrastructure as Code SME is probably not the best use of your dollars. Sure, I was able to put this side project in Terraform in under a day, but I also can't write a front-end application to get myself out of a wet paper bag.