Continuing advances in neural interfaces have enabled simultaneous monitoring of spiking activity from hundreds to thousands of neurons. To interpret these large-scale data, several methods have been proposed to infer latent dynamic structure from high-dimensional datasets. One recent line of work uses recurrent neural networks in a sequential autoencoder (SAE) framework to uncover dynamics. SAEs are an appealing option for modeling nonlinear dynamical systems, and enable a precise link between neural activity and behavior on a single-trial basis. However, the very large parameter count and complexity of SAEs relative to other models has caused concern that SAEs may only perform well on very large training sets. We hypothesized that with a method to systematically optimize hyperparameters (HPs), SAEs might perform well even in cases of limited training data. Such a breakthrough would greatly extend their applicability. However, we find that SAEs applied to spiking neural data are prone to a particular form of overfitting that cannot be detected using standard validation metrics, which prevents standard HP searches. We develop and test two potential solutions: an alternate validation method (“sample validation”) and a novel regularization method (“coordinated dropout”). These innovations prevent overfitting quite effectively, and allow us to test whether SAEs can achieve good performance on limited data through large-scale HP optimization. When applied to data from motor cortex recorded while monkeys made reaches in various directions, large-scale HP optimization allowed SAEs to better maintain performance for small dataset sizes. Our results should greatly extend the applicability of SAEs in extracting latent dynamics from sparse, multidimensional data, such as neural population spiking activity.