James Park wrote up a good explanation of virtual mass. Here it is:

"When you draw the bow you store energy. Not all of this energy gets to the arrow after the release, some of it is lost. A well established way of describing this is by the use of "Virtual Mass".
The way this works is that after release some of the stored energy of the bow is used to accelerate the arrow up to its final speed. The amount of energy that is lost could be described as being used to accelerate an effective mass of the moving parts of the bow (the "Virtual Mass").
So: the energy stored in the bow is split between the actual arrow mass and the bow's "Virtual Mass".
The arrow energy proportion is: (arrow mass)/(arrow mass + Virtual Mass).
The wasted energy proportion is: (Virtual Mass)/(arrow mass + Virtual Mass).
That is, the lower the arrow mass in proportion to the Virtual Mass, the lower the proportion of the bow's stored energy that ends up with the arrow. The lower the Virtual Mass, the more efficient the energy transfer will be, and the faster the bow.
The Virtual Mass is determined by many things: the mass of the string and other moving parts such as the limbs, cams and wheels, air resistance of the limbs, material losses in the limbs, etc.
You cannot measure the Virtual Mass directly. It is best measured by first measuring the fill percentage and the energy stored by the bow, and then measuring the velocity of an arrow of known mass. You can then calculate the Virtual Mass of the bow."