Unless the fixed return is something intolerable to the startup, such as 100% return, that would make a terrible investment. Even ignoring the go-big-or-go-home type of startup in SV, the vast majority of startups that seek to make profits from day one do not succeed - they'll fail and the investors lose the loan. The only situation in which this makes sense is for the loan to have a very very high return - usually a multiple (1x, 2x, etc), since investors will need that rare winner to subsidize the losers. This is how the entire VC industry in SV works, and it definitely still applies even if you want to make a profit-first company, it just applies to a sightly lesser degree (usually for VCs in SV, one company in their entire portfolio will need to deliver 50x+ return). This is also bad for the startup because now they have this loan that they have to pay back in X years that has a huge interest rate.

Essentially, this is bad for investors because investors get all the downside, but their return is quite capped.