This paper investigates 1) the factors that affect virtual project environments and 2) determines the interrelationship between them i.e., how one factor leads to another or both the factors can lead to the development other factors. Data collection using qualitative methods has been undertaken focusing on a range of virtual projects i.e. distributed and offshore projects, software and web development, and new product development projects. Thematic analysis has been undertaken to identify emerging themes affecting virtual project environments. The paper identifies that geographical differences lead to new complications, disturbs collaboration and create difficulties to monitor and control virtual teams. Similarly, behavioural issues affect relationship building which comprises of number of factors. The paper proposes a conceptual model which shows the interdependencies of themes; extracted during data analysis. Finally, the conclusion has been provided, which also gives suggestions for future research.