Mass culturing coral larvae collected from spawn slicks during spawning events and rearing them directly on reefs is an important method for coral reef restoration as it utilizes high genetic diversity and is readily upscaled. Understanding optimal initial stocking densities in mass cultures is, therefore, central to optimizing larval production efficiency. Yet, no studies have focused on optimizing initial stocking densities while coral embryos are still floating, despite the influence of density‐dependent effects during larval culturing. This study aimed to (1) explore initial stocking densities based on slick coverage and (2) determine the effects of initial densities on embryo development to coral settlement and early post‐settlement survival. Wild coral spawn slicks were collected at Lizard Island and reared at different combinations of slick coverage and density based on tank volume. Immediate density‐dependent effects were observed in treatments with 45% slick coverage, which had lower abundances of embryos 12 hours post‐spawning. The 12‐hour embryo densities ranged from 1.7 to 10.7 mL−1 and continued to display a negative relationship between density and survival of developing larvae. Overall, a density of approximately 5.1 embryos mL‐1 was the optimal stocking density for larval survival to competency (16.5%). The proportion of settlement and early post‐settlement survival was negatively correlated with higher initial densities, while a positive relationship was observed between the abundance of competent larvae and those settled, including initial settlers and 2‐month‐old recruits. These results highlight the importance of both larval quality and supply, and opportunities for site and system‐specific optimization of larval production in future work.