Ehrhardt Koch, the founder of New Era Cap Company, was an infant when he and his family migrated from Germany to the United States in the late 1800's. His family settled in Western New York on Erb Street in Buffalo, New York. Ehrhardt began working in headwear manufacturing in 1902, at sixteen years old. His first job was with Miller Brother's Cap Company, where he mastered many different aspects of the craft during his 18 year tenure; eventually becoming the cutting department manager. After years of failed attempts at further advancement and responsibility at Miller, Ehrhardt decided that to get to the top he would have to start at the top, so he decided to launch his own headwear company.

In 1920, at 34, Ehrhardt persuaded his aunt to take out a second mortgage on her house in order to raise money for the start up of his brainchild. With $5,000, 14 employees and a promise to his aunt that her children would always have a job, Ehrhardt founded the New Era Cap Company on Genesee Street in Buffalo, New York. New Era's entrée into the men's headwear market was with a fashion cap, the in-vogue, eight-panel constructed Pacer style, fitted cap, also known as the Ivy League or Gatsby. The Gatsby, made of 100% wool to match men's suits, was a high-end accessory distributed to Buffalo's leading menswear stores and sold as a finishing touch for the well-suited man. They sold for $3.98 per dozen.

One of Ehrhardt's principles for building a strong and successful company was including family in its foundation, and in 1925 his only child, Harold Koch, at 17 years old, joined New Era. Ehrhardt believed that the only way Harold would truly learn and appreciate the cap business was from the bottom up. He taught his son every aspect of the New Era business, always driving home his belief that a superiorly produced, quality cap was the most important part of making the New Era customer happy; it would always keep the customer coming back for more.