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.