The Virginia Plan favored the bigger states. The plan proposed that Congressional representatives be determined by the size of the state. This worried the smaller states, who didn't want to be ignored in the new Congress.
The New Jersey plan favored the smaller states. This plan suggested that Congress be made up of two representatives of each state so that everyone was fairly represented.
As a compromise, Congress was established with two houses. One house (House of Representatives) was a version of the Virginia plan, where the number of representatives for each state was proportional to the size of the state. The other house (Senate) was a version of the New Jersey plan, where each state had two representatives.