How much should laser engineers get paid?

Q: I like my job as a laser engineer but suspect I am significantly underpaid. Where can I find salary figures and how do I approach my manager, especially since my scheduled review is still months away?

Feb 1st, 2000

Milton Chang

Q: I like my job as a laser engineer but suspect I am significantly underpaid. Where can I find salary figures and how do I approach my manager, especially since my scheduled review is still months away?

A: There is no reason why you cannot initiate the discussion now. Scheduled reviews exist to provide order to running a business; they shouldn't be used as excuses to delay fixing inequities. I suggest you open a discussion with your company's Human Resources (HR) manager and also with your direct supervisor. Keep the discussion at a high level based on facts and reasoning—certainly it should not be confrontational.

Salary data relevant to your job should be available from your HR manager. I'd be worried about the management if this information is not forthcoming. You can also do some investigation on your own. Ask around. People can be quite open if you do not direct the question toward a specific individual and if they don't think you are just being nosy. The Laser and Electro-Optics Manufacturers' Association (LEOMA) publishes an annual salary survey that provides a detailed breakdown for our industry (whereas widely used salary surveys do not). However, it is only available to companies that participated in the survey. (To participate in next year's survey, contact LEOMA at info@leoma.com). There are also surveys published by recruiting firms, but the figures from some can be as much as 20%-25% higher than what is realistic.

Beyond that, you can check into the job market to develop a sense of what is fair. Read the classified ads in your local paper or surf the Web to find companies that have similar job openings and talk to their HR staff. You can also contact recruiting firms in your region and even post your resume with technical societies and on the Web. Assuming you are a good engineer, the likelihood is you'll be snapped up in an instant in today's job market. Good luck!

Q: I have a novel idea for telecom components. As a professor I can use my well-equipped lab to prove its feasibility and make initial prototype samples. How do I go about raising money to start a company?

A: Even with your lab, you'll need a lot of money. Given that the market window for telecom components is short, you probably can't afford to wait for government funding. In order to raise significant funding from the public sector, you'll probably have to first resolve or at least quantify the "physics" risks. And to help lower investors' sense of risk-taking, you should provide some substantiation of market needs and an estimate of what it takes to produce the product. At this proof-of-feasibility stage my recommendation is to raise seed capital from one or more angel investors who are familiar with the market and who can also mentor you.

Because the payoff for telecom investments can be huge, nowadays it is also possible for you to get seed capital from venture capitalists (VCs). But important questions remain. Can you realistically meet their expectation of a quick return? Will they put their senior partner on your board to provide substantive help? The risk of having a VC on board early is that it "poisons the well," precluding you from getting any additional funding should you ever lose their support. And you can easily do that during the uncertain times of an early-stage company. Another important point to note is not to take funding from either inexperienced angels or third-tier VCs. Once you are down that path, it is not likely you'll ever get top-tier VCs interested in future rounds of financing.

Q: I am talking to VCs about a telecommunications-systems business idea. What is a fair percentage ownership for me? I plan to remain a professor and provide technical expertise to the company.

A: Generally the further along you can develop the technology and the market, the greater percentage ownership you can retain. But in the telecom arena it is possible to raise money from VCs at ground zero. That makes sense, too, from your standpoint because it takes big resources to execute a systems business, and you want to hit the ground running. I recommend that you try to raise money from top-tier VCs, and lots of it, instead of using a stepwise approach. What you propose to do is akin to licensing your technology and that should provide a guideline to what you can reasonably expect. It is however, important to negotiate a percentage based on your ownership close to the time of an IPO because dilution due to subsequent financing will be outside of your control.

MILTON CHANG is chairman of New Focus and Arcturus Engineering and has recently founded New Incubator. He currently sits on the boards of Agility Communications, Euphonix, Gadzoox Networks, Iridex, LightConnect, Lightwave Electronics, and Optical Micro-Machines. Send your questions on personal career matters, starting and running your own high-tech business, or manufacturing and operations to Milton Chang at MMTChang@newfocus.com. Visit the New Focus Web site at www.newfocus.com.

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