Syneilesis palmata reproduces by both seeds and vegetative propagules (short rhizomes). The latter result in the production of new plants that are larger in size and hence have a higher survival probability and a higher growth rate than seeds. A previous study predicted that the optimal reproductive strategy, in terms of maximizing population growth rate (a fitness measure under no density regulations), was pure vegetative reproduction. However, high resource investment to vegetative propagules can cause local crowding resulting in reduced demographic performances of the plants, because the vegetative propagules of Syneilesis are produced close to one another. We examined, in this situation, the impact of allocating a certain proportion of reproductive resource to seeds with relatively greater capacity for dispersal. We simulated dynamics of hypothetical Syneilesis populations with various reproductive resource allocation balances (from pure seed to pure vegetative reproduction), using a density-dependent matrix model. In the model, it was assumed that plants from vegetative propagules experienced density-dependent reduction in their survival probabilities, but this was not the case for plants originating from seeds. Each allocation strategy was evaluated based on an equilibrium population density, a fitness measure under density-dependent regulations. The optimal reproductive strategy predicted was pure vegetative reproduction. Unrealistic conditions were required for seed reproduction to be favoured, such as the production of seeds one hundred times the normal number per unit resource investment. However, the conditions were fairly relaxed compared with those required in the model where no density effects were incorporated. This indicates that escape from local crowding is likely to be one of the roles of seed production in Syneilesis.