Looking at the article linked above, of the $82.6 billion raised in 2000, a fifth has yet to be invested. So, the VCs have the equivalent of a free-cash flow problem - they have more available investable resources than they have good investments. My guess is that this will result in their investing in some start-ups that they wouldn't have taken otherwise. For a corporation, this would be the equivalent of taking on negative-NPV projects. That's good for the startups, but bad for those investing in the VCs funds.
Venture Capitalists were busy raising money in 2004 and have some very full pockets of cash. The phenomenon is known as overhang, and you can read about it here.
More cash means more deals and probably a little bit looser purse strings with the investments they are willing to take. Good times are ahead for high potential ventures looking for money!
VCs are Flush with Cash (From The Entrepreneurial Mind)
This in from Jeff Cornwall at The Entrepreneurial Mind: