In a hip office in Leesburg's Market Station--exposed beams, a spiral staircase and a computer server storage room with a disco ball hanging from the ceiling--a tiny company's 15 employees are working to transform the most un-hip of industries.

AnnuityNet.com was founded almost two years ago and financially backed by a large insurance company, although founder Shane Chalke is looking for other funding. The company sells variable annuities--investment portfolios that allow consumers to invest over time (in, say, mutual funds) but include insurance features that guarantee regular payments after retirement.

What makes AnnuityNet different from a conventional company is that it sells these complicated and often-criticized products entirely online to investors who don't require hand-holding. Investors buy the annuities themselves--avoiding the commission--and AnnuityNet manages investors' accounts, collecting maintenance fees.

Chalke, an insurance industry veteran who developed software now used by most insurance companies, is banking on his products becoming as readily accepted as other investment vehicles, such as straight mutual funds.

"We're really trying to take the annuity business and transform it," Chalke said recently.

Annuities have long been viewed with skepticism in the investment community, primarily because of the high commissions earned by those who sell them. AnnuityNet eliminates the middleman, thus wiping out one of the main consumer objections.

Variable annuities have been most attractive to those investors who are 10 to 15 years away from retirement, said Calvin Brown, a certified financial planner at Payne Financial in Manassas. One reason is that the product guarantees the investor a monthly check after retirement regardless of fluctuations in the value of the investment--although the amount of the check varies. Another is that earnings are not taxed until they are withdrawn, like an individual retirement account or 401(k).

But AnnuityNet hopes to attract a broader audience, said Kristina Bultemeyer, the company's director of partner development. Bultemeyer, 31, spends a lot of her time figuring out ways to shed the annuity's stodgy image, especially with younger investors. She and her co-workers recently spent an entire Friday at a colleague's house discussing market segments, including the 35- to 45-year-old group.

One way they try to appeal to this group is through simplicity. Their World Wide Web site, www.annuitynet.com, shuns finance-speak in favor of an advice column format with a chatty tone. Headlines on the site include "Seven Ways to Simplify Your Life"--over an opening sentence that reads, "Come tax time you get a 1099, what the heck is this thing?"--and "14 Steps to Financial Freedom."

Still, selling a variable annuity online doesn't mean that investors--especially younger ones--will bite, some specialists say.

"I'm not sure that just a simple change in method is going to suddenly strike a chord with a younger investor," said Patricia Borowski, a division vice president with the National Association of Professional Insurance Agents.

But Borowski noted that today's under-50 investor does appreciate "that we have to take more individual control . . . of our future." Because the younger generation is not relying on Social Security or pensions and has been forced to play a more active role in retirement planning, "there is the potential there for them to be more positively inclined to listen to this type of product."

Chalke, 42, of Middleburg, is a repeat entrepreneur who admits he likes to move on before the romance of a start-up fades. His next venture, he said, could very well be related to airplanes. "I fly everything," he said. And he loves others that fly: He has a Brazilian parrot that accompanies him to the office.

The average age of his employees at AnnuityNet is about 35. Chalke said he recognizes the key role that environment plays in attracting young talent, so the office is funky and casual, and he runs an unlimited tab for caffeine products at the neighboring South Street Deli.

Bultemeyer worked for Lincoln Financial Group, AnnuityNet's primary investor, for eight years until she met Chalke. The start-up atmosphere appealed to her. "There's a time in one's life when you realize you can handle this kind of risk," she said recently, sitting at the black marble conference table outside her second-floor office, where the faint crackle of the building's metal roof expanding and contracting in the sun sounds at times like light rain falling.

During the Lincoln years, "I was able to learn a lot of that stuff that I never would tell anyone I knew anything about," Bultemeyer laughed, citing annuities and the tax code as examples. Now, she said, she uses all of that knowledge, but in the context of the much more exciting Internet.

In the online environment, she said, "everybody's always willing to talk to you," even though she admits she has to do a lot of explaining about her product. Still, few people turn her down during a time when "you never know when you're going to talk to someone who's got the 'Right Thing.' "

CAPTION: June Boynton talks with co-worker Ittai Kan in one of AnnuityNet's offices. The Leesburg company opened two years ago and has 15 employees.

CAPTION: Kristina Bultemeyer, of AnnuityNet, is working on changing the annuity's stodgy image, especially with younger investors.