Market Report: Essential tips: How to ring that bell on Wall Street

So, you want to start your own company. Ever since you were a little kid, you have wanted to bring your great ideas into the vast U.S. consumer market.

I don't know about you, but while all the other little boys and girls were dreaming of being professional baseball players, ballerinas, race car drivers, and firefighters, I always wanted to be the guy ringing the bell on Wall Street the day my beautiful idea went public.

OK … that's a joke. Seriously, I had way too many Hot Wheels cars to play with to even consider leading a company to Wall Street. But you get my point.

Anyways, you have your great idea. Maybe you are Al Gore and you invented the Internet. Or maybe you are Peter Pan, and you invented Peanut Butter. Whatever it is, you are pretty sure that your idea can make you some serious cash money. But how are you, a college student, going to make this idea a reality? There's so much money and planning involved! On top of that, your friends think your idea sucks, and your dad told you that he's not spending a fortune to send you to Boston College so you can think up goofy ideas in your room.

But you are still convinced. Your idea is the greatest thing since bottled water. On a side note, whoever came up with the idea to put some water in a plastic container and sell it on a mass scale for $1.50 to billions of consumers worldwide - genius. Back to your idea, though. Your first major concern is getting the money you need to run your business.

First, you have to hit up mom, dad, and Uncle Greg in Minnesota for some cash. If they think your idea is worth something, they might throw you some loose change. Most of the time, this isn't going to be enough to sustain your business, so you need to look somewhere else. You decide to pitch your ideas to some business angels. Business angels are mythical beings that float down from the heavens and sprinkle $100 bills on your eyelids as you sleep at night. Sorry, bad joke. A business angel is a high net-worth individual that invests in high-risk start-ups. Basically, these are people with more money than they know what to do with who try to hit the lottery by investing in start-ups. They never know when they might get in on the next Google. What are these guys looking for in your business? Typically, they are looking for revenue potential of $10 - $15 million in the next five years. They are normally interested in firms that are too risky for bank loans. They'll probably take a board position in your firm, but might not be too active. They also want a decent exit strategy, so they can come in, make their money, and peace out (Remember, these angels are capitalists).

Now, you've got a really good chunk of money, and business starts cooking. People are loving your product, and your growth potential is huge. In order to take your business to the next level, you are going to need some venture capital funding. Venture capital firms are going to hook you up with the big bucks.

They are going to want to take a pretty high managerial role in your firm, so you might lose some control. They will want a fixed fee, and some interest on any earnings you might gain in the future. Their investment horizon is about five to six years.

They're also interested in an exit strategy, but unlike the angels, they want to leave with a bang. They are either looking for your firm to be acquired by another larger firm, or for you to come out with an Initial Public Offering.

By this point, you are feeling pretty good about yourself. Visions of Bentleys and single-cup flavored coffee makers are dancing in your head. But hold on there, you've still got one more step to go. Call up your local investment banker and tell them you are thinking of an initial public offering (IPO). If you've done a good enough job thus far, there might even be multiple banks that want to help you out with your IPO. If that's true, they will court you. They will make grand presentations to you, and give you different valuations of your firm. This will be an important choice. The bank you choose will lead you through the entire IPO process. After you've chosen, you'll have an initial pricing discussion with the bank.

After that, you'll prepare a registration statement that you will file with the SEC. Then you'll go on a road show, where you'll pitch the stock to various commercial and private investors.

Throughout this time, you are building your books, which means you are figuring out how much investors are willing to pay for a share of your stock. After the road show, you head back to the farm and finalize the registration statement. Finally, the night before your IPO, you get together with all your banker friends and decide on the final share price. Sometimes this final night can be a party, and sometimes it can be a disaster, with the investment bank walking out on the firm at the last second. We'll just say your final night was the party kind. The next day, you issue the IPO, watch investors buy up all your stock, ring the bell on Wall Street, and plan your trip to easy street … right?

Wrong. There's usually something called a lockup provision, which requires the managers of the company to hold onto their stock for at least 180 days before they sell. Just think about it - if the manager took off with his or her millions the day the company went public, how would that look to the investors?

So, you wait your 180 days, and then, if your company hasn't tanked, it's all champagne and shrimp cocktails from there. Enjoy.