Dispersal can evolve as an adaptation to escape competition with conspecifics or kin. Locations with a low density of conspecifics, however, may also lead to reduced opportunities for mating, especially in sessile marine invertebrates with proximity-dependent mating success. Since there are few experimental investigations, we performed a series of field experiments using an experimentally tractable species (the bryozoan Bugula neritina) to test the hypothesis that the density, spatial arrangement, and genetic relatedness of neighbors differentially affects survival, growth, reproduction, paternity, and sperm dispersal. We manipulated the density and relatedness of neighbors and found that increased density reduced survival but not growth rate, and that there was no effect of relatedness on survival, growth, or fecundity, in contrast to previous studies. We also manipulated the distances to the nearest neighbor and used genetic markers to assign paternity within known mother-offspring groups to estimate how proximity affects mating success. Distance to the nearest neighbor did not affect the number of settlers produced, the paternity share, or the degree of multiple paternity. Overall, larger than expected sperm dispersal led to high multiple paternity, regardless of the distance to the nearest neighbor. Our results have important implications for understanding selection on dispersal distance: in this system there are few disadvantages to the limited larval dispersal that does occur, and limited advantages for larvae to disperse further than a few 10s of meters.