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Selling weight loss without effort.

COLORADO ALTITUDE TRAINING BILLS itself as "the world leader in altitude simulation systems," which is a lofty title but leads you to wonder why anyone other than a Mount Everest climber would want to simulate life at high altitude where oxygen is scarce and breathing takes some getting used to.

Where's the market for that?

Endurance athletes, mainly. Lots of them. The military, too--preparing troops for high-altitude missions. But that may be just the beginning.

Boulder-based Colorado Altitude Training is now taking aim on the nation's 51 million obese people. That's why CEO Larry Kutt took 20 minutes to tell his company's story during the 15th annual Rockies Venture Club Colorado Capital Conference, before a room full of venture capitalists at the Marriott City Center in downtown Denver.

The eight presenting companies at the June 12 session included ManiaTV! Network, which seeks to become the world's first live Internet television network;, which provides consumers an easy and quicker way to sell their unwanted CDs, DVDs and games; and WellDog Inc., which claims to have developed the next generation of natural gas exploration technology. Everybody had a story, and rosy projections for future sales. But Colorado Altitude Training was the most intriguing--and the most in need of explaining itself to curious prospective investors.

As Kutt explained, Colorado Altitude Training makes high-altitude-simulated rooms as well as tents that fit over a bed. Since launching in 2000, the company has already sold its products to Tour de France legend Lance Armstrong, the Chicago Bears of the NFL, the Philadelphia Flyers of the NHL, Nike, the Olympic Training Center and the U.S. Special Forces. Last year the company had sales of $1.4 million for the simple reason that athletes, according to a study by the U.S. Olympic Committee cited by CAT, can improve their speed and endurance up to 5 percent by incorporating altitude as part of their training.

But Kutt spent most of his 20 minutes in front of the venture capitalists explaining CAT's place in the multibillion-dollar weight-loss market--explaining that you can lose up to two pounds a week by spending eight hours a day at a simulated altitude of 12,000 feet, even if you're just sleeping.

"There's over 50 studies that document this," he said. "All people really need to do is sleep at altitude, and their body goes into altitude climatization mode, and that will trigger the weight loss." He then rattled off some compelling facts: 51 million Americans are clinically obese, and there are no accepted therapies for weight loss--only drugs approved by the FDA.

"Our system for weight loss is cheaper," Kutt said, explaining that the $7,500 cost of a high-altitude tent would come to $99 a month financed. "Obesity experts are behind us." He then went on to project sales for CAT of $91 million by 2006, based on sales to just a tiny fraction of those seeking to lose weight. He also cited patent protection--the company has been issued two patents and has two pending.

Having made a dent in the sports market, CAT is now selling weight loss without effort. Imagine shedding pounds while sitting or sleeping in your tent--or your bedroom, den or office converted into an $18,000 "Colorado Mountain Room."

Venture capitalists seemed intrigued. It's worth mentioning that CAT was voted the best business plan out of the eight presenting firms at the conference. The company is in the process of securing an angel round of funding for $500.000 to $1 million. Next year it hopes to secure a VC round of funding for about $5 million.

"There's a lot of interest from VCs." Kutt said. "We're not quite ready for them. We're doing an angel round now. And we've got several VCs lining up to do our VC round."
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Title Annotation:Colorado Altitude Training; money matters
Author:Taylor, Mike
Geographic Code:1U8CO
Date:Aug 1, 2003
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