Five Zero Communications will initially target Exeter's growing tech industries as well as servicing a wider national and international market. A second office will be opened soon to service the London market.
The agency launches with the London-based on-demand labour supplier MBA & Company as its first client.
Chatterton will take up the role of managing director. He most recently headed up the corporate B2B team at Storm Communications and before this worked at a number of agencies including Johnson King (now part of Finn Partners) and Schwarz Communications (now part of MSL).
Band, who founded Band & Brown Communications in the 90s, has been searching for an investment since selling the £7m-turnover agency in 2010. Band & Brown merged with sister agency Brando to form Citizen Brando.
Band will act as chairman of Five Zero and run operations in London. He will continue to work for Berlin, a virtual comms business he first set up in 2012 and relaunched in 2013.
Chatterton said: "When Nick and I first started talking about a start-up, we wanted to offer high value services to a growing market. Exeter ticked all the boxes and we headed west."
Last year, Band was planning to offer a £100,000 investment into a new start-up, but found no entrants into the Dragons' Den-style competition met the standard for which he and fellow would-be investor Mark Borkowski were looking.