Whole scenario is totally unrealistic. (Though if I parked $100M in cash at a bank I would not be surprised if it offered me a AAA bond @ 12% for, say, $500K. This will cost them $60K per year or 0.06% of this totally unrealistic principal. Maybe they'd do this to mollify me, I don't know. Point is, if my target is 10% returns then I should accept!)
What the bonds stand for is tptacek's business, which " has a Y2 ARR(!) and revenue target that I think would make a lot of YC companies pretty happy" but is "not a sensible investment for venture capitalists".
well yeah, if someone doesn't want venture funding no VC is going to beat down their door and make them re-do their business plan so they can take an equity investment :)
what I said applies more to companies that do want or need venture capital for their plans. These startups are not getting enough first financing checks.
In your hypothetical... if "lottery tickets" are the metaphorical stand in for "unproven startups", what does the bond paying 12% realistically stand for?
There isn't a AAA-rated bond that pays 12%. Or, to generalize further, there isn't an investment vehicle <X> that guarantees to pay VC_hoped_for_returns plus +2%. (In any case, if we're talking about AAA bonds, the LPs can just invest in that themselves without involving VCs as middlemen. E.g. you don't need VCs to buy US Treasuries on your behalf.)
To get higher interest rates that compete with good VC returns, you're getting into junk bond territory. Junk bonds have higher risk for defaults. Junk bonds require more research to assess returns. One could also try to sell the bonds on the bond market before the maturity but either way, you're now back in "lottery ticket" territory for bonds.
You're creating fictitious scenarios that don't have realistic choices.